Tiered Pricing
Tiered pricing applies different rates to different quantity ranges, with each tier priced independently.
When should I read this?
Read this if you want to offer graduated pricing where the rate decreases (or increases) as quantity grows.
How it works
Each tier has its own rate. Charges are calculated by applying each tier's rate to the units in that tier.
Example: Per-seat pricing
| Tier | Range | Rate |
|---|---|---|
| 1 | 1-10 seats | $15/seat |
| 2 | 11-50 seats | $12/seat |
| 3 | 51+ seats | $10/seat |
For 25 seats:
- Tier 1: 10 seats × $15 = $150
- Tier 2: 15 seats × $12 = $180
- Total: $330
Tiered vs. Volume pricing
| Model | Behavior |
|---|---|
| Tiered | Each tier priced separately, cumulative |
| Volume | Single rate applies to ALL units based on total |
Setting up tiered pricing
When creating a price:
- Select "Tiered" pricing model
- Define tier ranges and rates
- Set billing interval
Best practices
- Reward growth — lower rates for higher tiers
- Clear boundaries — avoid confusing tier structures
- Communicate value — show savings at higher tiers
Common patterns
| Pattern | Description |
|---|---|
| Graduated discount | Lower per-unit cost as quantity increases |
| Graduated premium | Higher per-unit cost for specialized tiers |
| Flat + tiered | Base fee plus tiered add-ons |