Product bundles have long been regarded as a strategic avenue for businesses to drive sales and offer added value to customers. However, product bundles might not be the solution it’s made out to be.

A key element to consider is price anchoring. This realization dawned on me during my tenure managing an ecommerce store in the past and observing numerous clients for whom we handle fulfillment.

A few years back, a successful client of ours attempted a campaign focusing on selling product bundles rather than individual items. The goal was simple: elevate the average order value. However, it didn’t quite hit the mark.

The big issue? Price anchoring. Customers landed on the bundle page, were faced with a hefty price tag, and often clicked away. It's a common response - seeing a large amount upfront can make potential buyers hesitant, leading to lost interest and missed opportunities.

Picture this: you're offered a safety button for $20, something practical that your grandmother could use in emergencies. Then, for an extra $30, you're presented with a camera to keep an eye on her via an app on your phone. Suddenly, that extra $30 doesn’t seem too daunting, as it aligns with the value you’ve already seen in the initial product.

Imagine being offered two more cameras for $20 and $10, making you feel like you’re getting a steal. These extra cameras can be placed strategically around your grandmother's house, ensuring her safety no matter where she is.

The challenge arises when the entire bundle is presented upfront for $80, including all these individual products. Two significant issues emerge here:

1. Potential customers who might have been interested in just the safety button are put off by the high price.

2. The leap from an unknown price to $80 can feel overwhelming, deterring potential buyers.

The solution? Introduce products gradually. Start with the standalone item that initially caught their interest. This way, you capture those who might've been hesitant with the full bundle price. Plus, you open the door to upselling the additional products incrementally, making it feel less like a splurge and more like a valuable addition.

It might be tempting to push the bundle straight away, but from experience, while the average order value might rise, the actual conversion rate often decreases significantly. Ultimately, the increased average order value might not compensate for the loss in conversions.

So, the key takeaway? It’s about finding that sweet spot. Starting small and gradually introducing additional products seems to strike the balance between customer interest and increased value.

For more on dropshipping read our blog post: Dropshipping: What You Need to Know Before You Start (2023 FAQ)