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Your Take: Unbundling & A La Carte Pricing

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I call it “a la carte” pricing, various industries all it “unbundling,” but more and more industries are breaking out how much you pay for what services when you do business with them. It was the subject of Art Pine’s article in Kiplinger’s and he goes into detail about the logic of bundling and unbundling your pricing.

Personally, I like unbundling as long as I have control over what I can buy. When a hotel breaks out the price of everything on the folio, especially on things I have no input on, I find it as unnecessarily complex. It’s as if they broke out the housecleaning charges, the linen charges, the water bill, the little soaps and shampoos, and the electricity bill – as if I had a choice in how much I consumed of each. I like that airlines are charging for baggage because in theory the baggage-less people aren’t paying for the baggage-laden travelers. In reality, I think the airlines just price compete with each other and tack on the baggage fees to make the traveler (more) profitable.

What do you think about unbundling?

{ 9 comments, please add your thoughts now! }

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9 Responses to “Your Take: Unbundling & A La Carte Pricing”

  1. Scott says:

    Actually, I’ve been told (but need to verify) that airline baggage fees got separated out from ticket fares on most airlines because it’s a tax loophole. The “fees” get taxed at a lower rate than the ticket “fares” get taxed. So by separating the charges, the airline saves money on taxes.

    As for unbundling, I am 100% for it in many areas, particularly cable. We don’t have cable right now because we don’t think the expense is worth it… but if someone offered just ESPN for $10 per month instead of ESPN plus 100 other channels for $50 per month, I would be much, much more inclined to deal.

  2. Mike says:

    I sure get mad when I look at my cell phone, home phone, or satellite TV bill. All the little charges broken out for things I don’t care about. If Walmart or Target listed product price, handling fee, administration fee, checkout fee, baggage fee, utility fee, lease fee, and all other fees involved in running the business, you would really not like seeing that receipt. My feeling is that if you can’t just list a price for the complete product or service, then I am paying for more than I need. If bundling ends up hiding these fees, at least I have a total price to compare other options to.

  3. Glenn Lasher says:

    I have no problem with unbundling on the sole condition that bundled deals also be offered. Likewise, I have no problem with bundled deals provided that unbundled options exist.

    Scott mentioned taxes on airline charges, but regardless of whether or not that is the case, I would be willing to pay a little extra for certainty. I hate flying, and if I am going to go through the stress of it, I want to be sure that the immediate and obvious stresses aren’t going to be compounded by “gotcha capitalism”.

    Similar to Scott wanting a cable package with ESPN only, I want one with no sports. I am not a sports fan, and I would love to be able to order a bundle of Discovery (and its affiliates), BBC and HBO. For local channels, I have an antenna and I’m not afraid to use it.

  4. I hear from bookkeepers that it is a nightmare when things are unbundled. Then there is no point to unbudling things we have no control over…

  5. june says:

    I have a question for you all: what are your thoughts on unbundling/a la carte medical services, such as when you get an eye exam, and the exam is split up from the dilation, so that the dilation is an extra charge? Has this ever happened to you? Just wondering.

    • Shirley says:

      When a family member had surgery we got a bill from the surgeon and thought, “Well, that was not so bad after all.”

      Then came one from the hospital. Now it’s, “Dang, I thought that was included. Can’t do surgery without a hospital, right?”

      The next was from the hospital pharmacy.
      The anesthesiologist sent his soon after that. “Hey, wait a minute! Is there an end to this in sight?”

      I think I would have been happier (?) with having the whole bill bundled and knowing the final and total cost to start with.

      • Scott says:

        This highlights a completely different problem with the medical industry – the fact that no one can quote you a price up front. What other business has the luxury of saying, sign here and we’ll decide what we want to charge you later when it’s too late for you to say no? If you walked into a doctor’s office right now and asked how much it would cost for you to get a physical, they would give you the biggest blank stare ever.

  6. bloodbath says:

    Unbundling can become a can of worms in some if not most cases. And it would most likely result in products and services becoming more and not less expensive. I’m sure there will be added expenses involved in the work it takes to unbundle as well as to combine the items again to produce a bill for the customer. (Though, cable services are exceptions)

  7. Erik says:

    I generally dislike bundle “deals” as they aften include things that I won’t use/don’t want and command a higher price for those.

    Any company that lets me unbundle has me sold. For instance, just saved on bundling earlier this month when moving my personal email and all of that off of google apps and to office 365.

    Initially I was bummed that the plan I was going to go with was twice the price of google apps and included a couple of things that I knew I wouldn’t use. About 80% through the transition I was poking through the various packages and stumbled upon a page that let me get just the email service for the same price as google apps.

    Saved me a bunch of cash on features I wouldn’t otherwise use and I’m a much happier camper now then I was with Google Apps :)


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