How Amazon and McDonald’s Use Bundling to Sell More of Everything
A former Google exec breaks down the biggest myths about the bundling business model
Amazon Prime. The G Suite. Netflix. Cable TV. Spotify. It may not seem like these services have much in common, but all of them are built on the theory that you can make more money selling a bundle of products rather than offering them individually. Bundling is by no means a new phenomenon—insurance companies and credit cards, for example, have used the model for years—but as the internet has enabled low-cost distribution of digital products on a global scale, bundling has become an increasingly popular business model. Why would anyone pay for a bundle of products they might not enjoy evenly, instead of paying only for the stuff they truly love? And why does it make sense for companies to sell a bundle of products at a discount when there are customers willing to pay full price for their favorite products?
Shishir Mehrotra has spent a lot of time thinking about these questions. He’s the co-founder and CEO of Coda, an online document startup that aims to compete with Google’s G Suite and recently raised $80 million in Series C funding. Mehrotra, a former Google exec and a member of Spotify’s board, authored a paper called “The Four Myths of Bundling” earlier this year…
