Bundling Systems is the combination of a single product with other complementary products or services to increase profit, sales and market share. It can also be used to reduce distribution and marketing costs, or to clear out aging inventory. Bundling is most effective when consumers are expected to consume multiple items or services over time, such as a monthly subscription to Netflix or a yearly membership to Disney+.

For example, a company might offer to bundle its streaming service with free shipping on purchases of two other products such as shoes or clothing. This can be a great way to increase customer value and create loyalty. It also allows companies to sell more products with the same amount of energy and money, increasing revenue.

Common Challenges and Solutions in Bundling System Operations

However, there are risks of bundling. Consumers may feel pushed into buying products they don’t want, or might feel they paid more than they needed to. For instance, Microsoft’s bundling of its Internet Explorer browser with Windows helped it gain market share quickly against Netscape. Moreover, when bundling results in the loss of competition in a certain market, it can lead to anti-competitive behavior.

To avoid anti-competitive effects, a government agency considering bundling should research to ensure that the benefits of bundled offerings are substantial and outweigh the potential losses in per item profit margins. This can be done by submitting a well-constructed request for information (RFI) that elicits credible information about potential savings and performance benefits from the provider of the bundled offering.