Tiered Billing

Nicolas Audet
Nicolas Audet
  • Updated

Overview

Tiered pricing is now available for recurring subscription products, enabling flexible billing for services based on usage. This feature is particularly valuable for industries like mobile, phone, and VOIP services, where pricing often depends on bulk usage.

 

Understanding Pricing Tiers

Pricing tiers allow businesses to charge customers based on the quantity of service used. Two billing models are supported: Volume or Graduated pricing.

In this model, all units are billed at the price defined in the highest tier reached. For example:

Tier Range Unit Price Base Price
1 1–4 $3 $1
2 5–9 $2.50 $1
3 10+ $2 $0

1. Volume Pricing

If the selected quantity is 10, the total price in the volume model would be calculated as:

10 units × $2 + $0 = $20

2. Graduated Pricing

In this model, pricing is applied progressively across tiers. For the same example:

The total price for 10 units would be calculated as:

  • Tier 1:4 units × $3 + $1 = $13
  • Tier 2:5 units × $2.50 + $1 = $13.50
  • Tier 3:1 unit × $2 + $0 = $2

Total: $28.50

How to Set Up Tiered Pricing

  1. Navigate to the product catalog and create a new product
  2. At the first step (general information), select Payment strategy:Recurring unitand Billing scheme:Tiered
  3. In the second step, define the ranges, unit prices, and base prices for each tier (you can assign as many tiers as you desire, with a minimum of two tiers)
  4. Continue product creation as usual, following the steps
  5. Save to create the new product

How to Create a new product version

  1. Go to the product to edit
  2. Click +add version
  3. Same as when creating a new product: select Payment strategy:Recurring unitand Billing scheme:Tiered
  4. In the second step, define the ranges, unit prices, and base prices for each tier (you can assign as many tiers as you desire, with a minimum of two tiers)
  5. Save to create the new version

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