Poll: Do you think you get the best deal with ag input bundling?

(supplied)

Sometimes it just feels good to complain about things, even if there’s not much to be done about the issue. A common complaint I hear from farmers is that they hate participating in product bundling from ag retailers.

“Why not give me a lower price for a product instead of offering programming?”

“I just want your best price.”

“I don’t want to buy that product, why do I have to to get the bundle?”

Sound familiar? Either you’ve heard these phrases, or even uttered them yourself. The reality is that whether its bundling agricultural inputs, buying a Happy Meal at McDonald’s, or bundling your satellite TV, internet, and phone data, farmers and consumers respond to the opportunity for savings in exchange for added loyalty or purchases.

But if we all love to hate bundling so much, why do companies seem so committed to it? Some of the data is actually counterintuitive to what you may think.

Many people assume that products are bundled to force you to buy unwanted products or get access to products in higher demand.

In study by the Harvard Business School, researchers Timothy Derdenger and Vineet Kumar found that although bundling can increase revenues for the company, a buyer’s desire to access bundles significantly drops if the products are not offered individually.

This is counterintuitive to how many people would also see agricultural input bundling, but it holds.

In talking to seed dealers that do not sell fertilizer and crop protection products, they reiterated that they hear from producers about how much they hate bundling, but at the same time many of those same producers opt to purchase the bundled packages even though a seed-only option is available.

As crop protection companies and agricultural input suppliers have consolidated there is a growing trend to bundle the entire grower offer — from seed, to spray, to fertilizer and more.

Let us know what you think about product bundling in this week’s poll, comment below or send your comments to [email protected] 

 

Shaun Haney

Shaun Haney is the founder of RealAgriculture.com. He creates content regularly and hosts RealAg Radio on Rural Radio 147 every weekday at 4:30 PM est. @shaunhaney

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