How Much Discount Should a Product Bundle Have? The Margin Maths

A product bundle should carry the smallest discount that changes what the customer buys, and never more than the extra contribution the bundle brings in. For many bundles that means a modest saving funded largely by shipping one parcel instead of two; for convenience bundles it can mean no discount at all. This guide shows how to work the number out from contribution per order, with one worked example, and how to tell when the discount is doing nothing.

What is the right way to size a bundle discount?

Start from contribution per order, not from a percentage that sounds generous. Contribution is what is left from the order after the product costs, packing, shipping and payment fees that the order itself causes.

Two views of the same bundle will disagree:

• Per unit, a discounted bundle always looks worse. Each item earns less than it does at full price.
• Per order, it can look much better, because the costs that come once per order are now spread across more items.

Per order is the view that matters, with one condition: you have to compare the bundle with what that customer would otherwise have bought. A percentage chosen without that comparison is a guess.

A worked example

Say a skincare store sells a cleanser for $24 and a moisturiser for $30. As example figures, the cleanser costs $8 and the moisturiser $10 to produce, and packing and shipping cost $6 per parcel whether it holds one item or two.

Sold alone:

• Cleanser only: $24, less $8, less $6, leaves $10.
• Moisturiser only: $30, less $10, less $6, leaves $14.

Sold together, the costs are $18 of product and $6 for the one parcel:

• Both at full price, $54: leaves $30.
• Bundle at 10 percent off, $48.60: leaves $24.60.
• Bundle at 15 percent off, $45.90: leaves $21.90.
• Bundle at 20 percent off, $43.20: leaves $19.20.

Whether 15 percent is a good discount depends entirely on who takes it.

• A customer who would have bought only the cleanser now leaves $21.90 where they would have left $10. The bundle gained $11.90.
• A customer who would have put both items in the basket at full price now leaves $21.90 where they would have left $30. The bundle cost $8.10.
• A customer who would have bought the two in separate orders would have left $24 in total. The 10 percent bundle leaves $24.60: the parcel you did not ship paid for the discount.

In this example the 15 percent bundle pays for itself as long as at least about two in every five bundle buyers are people who would otherwise have taken the cleanser alone. That is the question to answer from your orders: how often do these two products already appear together at full price? If they rarely do, there is room for a discount. If they usually do, the bundle is a convenience and the discount is a gift.

How much is one parcel worth?

It is worth whatever a second shipment would have cost you, and that is the natural budget for a bundle discount. Packing materials, the pick, the label and the fixed part of the payment fee all come once per order.

Check who actually pays for shipping in your store before spending the saving:

• If you ship free above a threshold, the bundle may tip the order over it. The saving from one parcel is then partly spent on the free shipping you just triggered.
• If the customer pays shipping, they already save by ordering once. That saving is a reason to buy the bundle that costs you nothing, so say it on the page.

When does a bundle need no discount?

When the value is in the selection, not the price. A bundle that saves the customer a decision can sell at the sum of its parts.

• Starter kits for people who do not know what they need.
• Routines and systems where the parts are designed to be used together.
• Gift sets, where presentation and a single price point do the work. Our guide to holiday gift sets and seasonal bundles covers these.
• Compatibility sets, where the bundle guarantees that the parts fit each other.

If you want a reward without cutting the price, add something small that is only available in the set. Whether that works better than money off is covered in free gift or percentage discount.

Where is the ceiling?

Below the point where the bundle earns less than the order it replaces, and below your own promotions.

• Do not outbid your sales. If the standing bundle discount equals your deepest seasonal offer, the sale has nothing to add.
• Decide what it combines with. A bundle discount that stacks with a welcome code is a larger discount than the one you costed. Check the combination settings before publishing.
• Keep the comparison honest. The 'was' figure should be the real sum of the items' current prices. Rules on reference prices differ by market, so check the ones that apply where you sell.

How should the saving be shown?

As a plain total beside the sum of the parts: both prices, and the difference in money. The shopper should not have to add up the items to see what the bundle saves. If shipping is cheaper as one order, state that too.

The saving shown on the page has to be the saving at checkout. Marka Bundles & Upsells discounts fixed bundles automatically at checkout through Shopify Functions, so there is no code for the shopper to enter. For choosing between bundle types in the first place, see our guide to Shopify bundles.

A short checklist

1. Calculate contribution per order for each item alone and for the bundle.
2. Count how often the items already sell together at full price.
3. Set the discount no higher than the one-parcel saving plus what the upgrade earns.
4. Ask whether the bundle is a convenience that needs no discount.
5. Confirm what the bundle discount can combine with.
6. Show both totals and the saving in money.
7. After launch, track profit per order as described in our guide to bundle metrics.

A bundle discount is a cost like any other, and it deserves the same sum you would do before buying stock. Once the number is settled, Marka Bundles & Upsells lets you build the offer in the Shopify admin and preview it before publishing.