Managing Promotions in Shopify: Bulk Pricing
*** This is the 5th and final post in our 5-part blog series exploring the huge returns you can see by using successful ecommerce promotions. Follow them all to get valuable tips on strategically planning promotions and how to execute them in Shopify. Follow the links below to take a look at the previous four posts in the series:
The other week, I was looking to buy a new pair of socks. (Like these with a lifetime guarantee.) Even though I have a drawer at home that’s nearly overflowing with socks. Some are a matching pair, and others, well let’s just say that the sock monster that lives in the washing machine is well-fed. But regardless of what condition my socks are in, I can always use more.
In this situation, a bulk discount could be an easy way to get me to buy more than just a single pair. For example, if I see a banner advertising 3 pairs for the price of 2, that could be a pretty appealing offer. I’m always going to need more socks. (Especially if they have cool color blocking or little lobsters on them.)
The same approach works for most smaller or low-cost items that people tend to purchase frequently and/or buy in multiples. Like hair elastics. Or flower bulbs. Or writing utensils.
Bulk pricing is a great way to offer discounts when customers buy a certain quantity of a single product.
B2C vs B2B: How Does Bulk Pricing Differ?
Bulk pricing is more commonly associated with B2B and wholesale businesses. Also called “volume discounts”, this promotional tactic gives sales professionals the flexibility to entice a customer to buy more, and allows businesses to show appreciation to loyal customers.
Download our ebook, “Understanding Wholesale on Shopify.”
For now, B2B certainly represents a larger market for bulk pricing, with the average B2B order value coming in at $491 — more than double the average retail order of $147.
But regardless of whether you’re buying pens for the office supply room or toothbrushes for your home storage closet, volume pricing has a distinct appeal.
What Do Retail Shoppers Like About Bulk Pricing?
The psychology behind bulk discounts is that customers will buy more than they actually need because it is perceived to be a better deal.
Consider the last time you went to a movie theater. If you bought popcorn, did you have to think long about whether to buy the small, two-handfuls size popcorn or to upgrade to jumbo for just $2 more? Yep, I go with jumbo too. Who cares that I don’t need 16 cups of buttery popcorn sitting like lead in my belly for the rest of the afternoon? I’d much rather get a jumbo tub for $12 than a too-small bag for $10. Same goes for the 7–11 Big Gulp. But I think we’ve talked enough about my poor diet habits for one blog post.
To get back to the topic at hand, let’s dive into how you can introduce bulk pricing into your promotional mix.
Bulk Pricing Strategies
First of all, ask yourself why you’re offering a bulk discount. This promotional method works incredibly well for:
- Increasing the average value per order
- Clearing out inventory
- Keeping your price competitive relative to the competition
However, banners that advertise “Bulk Pricing” or “Volume Discount” aren’t likely to compel any shoppers to add more items to their cart. Like any promotion, the language is critical to the offer’s success. Get creative and be willing to try out different phrases and bulk offerings.
Will a “4 for the price of 3” generate more sales than “25% off when you buy 4”? Is “Buy More and Save” specific enough or do your customers seem to prefer more detail like “Get 2 for Just $xx More”?
As you’re experimenting, keep in mind that there are several different ways to establish bulk quantity requirements. Any of the following methods can be offered using either a percent or a dollar amount discount:
All-Units
The price per item is based on volume tiers.
Example: If a shopper buys less than 5 of the item, the per-unit cost is $1.50. If the shopper buys at least 5 but less than 10, the per-unit cost is discounted to $1.25. And if the shopper buys 10 or more units, the cost is discounted further to $1.15 per unit. This common approach is easy to understand and simple to execute.
Incremental
This method applies discounts in increments to units ordered above a specific price tier.
Example: If a shopper buys one unit the cost is $10. If the shopper chooses to buy two units, the first will cost $10 and the second will be discounted to $8. If the shopper buys five units, the pricing will be $10 for the first unit, $8 each for the second, third and fourth units, and a further discount of $6 for the fifth; the total would be $40 or a per-unit cost of $8.
Package Pricing
Customers must buy defined packages of units at a fixed price.
Example: The shopper must purchase either a package of 5 units for $65 ($13 per unit), or 10 units for $115 ($11.50 per unit), or 15 units for $150 ($10 per unit).
Now, I know you’re waiting patiently to find out how you can make bulk pricing work in your Shopify store. Here’s the scoop…
Using Shopify to Offer Bulk Pricing
Once again, our go-to app for integrating this into Shopify without high-level technical knowledge is made by BOLD. Those guys rock.
Quantity Breaks is that app that will make it easy to do tiered pricing and quantity breaks in Shopify. Quantity Breaks is free for a 30-day trial period, and then is $16.99 per month.
To install and use Quantity Breaks:
1. Go to your Shopify admin area and click on “Apps.” Click “Visit App Store” and search for “Quantity Breaks”. Download the app.
2. For the app to function with your theme, you must install liquid code. If you don’t know how to do this, BOLD provides instructions or will do this part for you.
3. For the app to function with your theme, you must install liquid code. If you don’t know how to do this, BOLD provides instructions or will do this part for you.
4. Click “Create New”.
5. Enter an internal name.
6. Choose whether you want to you want your bulk discount to be a dollar amount, a percent, or a fixed percent. (“Percent” is used in most bulk discounts.)
7. Choose to apply the quantity break per variant (which means that the customer must purchase a quantity of one single item) or across a group (for example, buy 5 or more hats and get 10% off)
8. Define your bulk discount tiers. In this example, customers who buy 5–9 items will receive 10% off, those who buy 10–19 items will receive 20% off, and those who buy 20 or more items will receive 40% off.
9. In the section “Select Products”, click to “Select Products”. At the top of the pop-up box are a series of search filters to help you find the specific products you want. Or you can simply look to the “Results” section below and identify the product/collection you want to include in the bundle. Click “Add” and then “Continue with Selected Products”.
10. From the graphic options provided, choose how you would like your bulk discount to be displayed.
11. Click “Create”. (This process may take a few minutes.)
Your new bulk discount will now appear on the product pages for all of the products that you chose. (If you don’t see the bulk discount, you may have skipped the initial liquid install; see #2 above).
Use Shopify Scripts to Create Bundles
Another way to add bulk discounts to your Shopify Store is with scripts. This method requires technical knowledge of advanced coding techniques, but can be a more customizable way to offer your customers automatic price changes based on order size, product volume, availability, and customer location.
That’s a wrap on our blog series on managing promotions in Shopify!
If you’re interested in using Shopify Scripts for your bulk discount promotions, give us a call! We’d be happy to put one of our techie folks on the job!
Growth Spark is an award-winning, nationwide team that helps e-commerce companies grow by building unique web experiences that convert visitors into customers. We are proud to be an official Shopify Plus Expert and can help you grow your e-commerce business. If you’re interested in learning more give us a shout!
