The paper considers product bundling as a strategy of a brick-and-mortar firm to compete with an online competitor producing identical product but having cost advantage. The effectiveness of the bundling strategy depends on two crucial characteristics. First, the product is a search good, so that some consumers will visit the brick-and -mortar store to inspect the product, which is not possible for the online store. Second, the inspection cost is sunk for the consumers who visit the store but before purchase. By offering bundle to the consumers who visit the store, the firm can grab a portion of consumers whose ex ante preference for the good is of high values, who will otherwise purchase online without the bundle.