How do I price 1, 3 and 5 pack options?
Multi-pack pricing rewards bigger baskets but trims your profit per unit, and this example shows exactly what each tier earns on a product costing Rs 100.
Offering a single pack, a 3-pack and a 5-pack is a neat way to raise order value. It also invites the mistake of discounting so deeply that the biggest pack barely earns anything. Let us price the tiers from your cost upward.
The setup
Say each unit costs you Rs 100 all in. You decide on these prices.
- 1 pack: Rs 200
- 3 pack: Rs 540, which is Rs 180 per unit
- 5 pack: Rs 850, which is Rs 170 per unit
Profit per pack and per unit
Single. Revenue Rs 200, cost Rs 100, profit Rs 100. Margin: 50 percent.
3 pack. Revenue Rs 540, cost 3 times Rs 100, which is Rs 300, profit Rs 240. Per unit that is Rs 80. Margin: 240 divided by 540, about 44.4 percent.
5 pack. Revenue Rs 850, cost Rs 500, profit Rs 350. Per unit that is Rs 70. Margin: 350 divided by 850, about 41.2 percent.
Notice the pattern. The bigger the pack, the more total profit per order (Rs 100, Rs 240, Rs 350), but the less you earn per unit (Rs 100, Rs 80, Rs 70). That trade is the whole point of tiers. You give up some margin per unit to gain a larger, more valuable order.
Why that trade can be worth it
Fixed costs per order do not grow with quantity: one box, one label, one payment fee, one trip to the courier. If shipping a single costs Rs 70 and shipping the 5-pack costs a little more, the cost of delivery per unit falls a lot. The numbers above ignore shipping, so add your own to see the true effect. Our post on landed cost per unit helps with that.
Set a floor before you set the discounts
Decide the lowest margin you will accept on any tier, and make sure the largest pack stays above it. If you want at least 40 percent on every tier, the 5-pack at 41.2 percent only just passes. Any deeper discount would break the rule. The same logic is used in the maximum bundle discount.
Watch the product weight
Heavier packs may move into higher shipping slabs, which can wipe out the per-unit saving. A 5-pack that costs Rs 140 to ship instead of Rs 70 changes the picture. See weight slabs and use your courier's actual rates.
Make tiers easy to understand
- Show the per-unit price next to each option so buyers see the saving.
- Keep the discount steps sensible, not random.
- Do not offer too many tiers. Three is plenty for most catalogues.
- Make sure your stock can handle the largest pack selling out your inventory of the item.
If a customer wants a quantity that does not match a tier, handle it gently. Our note on bulk orders and lot pricing covers larger quantities.
Present them with anchors
Placing the 3-pack in the middle with a tag such as "most picked" nudges people only if it is true, so test before you claim anything. For presentation ideas, see price anchoring.
In short
Start from unit cost, choose prices for each tier, calculate profit per unit and per pack, and check that your largest pack still clears your margin floor. Then adjust until the discount feels generous to buyers and sustainable to you.