The Tiered Pricing feature in Subotiz allows merchants to set flexible rates that scale with customer usage within each billing cycle. Instead of charging a flat rate per unit, merchants can define tiers that adjust pricing based on total usage reported during the cycle. Subotiz supports two calculation methods, Volume tiers and Graduated tiers, both designed for usage-based billing under recurring subscriptions.
Business Applications
Tiered Pricing helps merchants:
- Offer fair rates that reward higher usage.
- Align pricing with customer behavior and consumption levels.
- Automate complex billing logic through recurring subscriptions.
This model is commonly used in cloud storage, SaaS API billing, and digital media services where pricing scales with actual usage. Once you identify which model fits your business, you can configure the corresponding tiers directly in Subotiz.
Tier Calculation Methods
-
Volume Tiers: The Volume model applies one price to all usage within a billing cycle, based on the tier that matches the customer’s total usage. It is best suited for simple pricing structures where a single rate applies once a certain usage range is reached.
- Their usage falls within Tier 2 (101 – 500 GB).
- Subotiz applies the Tier 2 price to all 450 GB.
- Invoice = 450 × $0.15 = $67.50
-
Graduated Tiers: The Graduated model charges each portion of usage at its corresponding tier price. This method provides progressive discounts and is ideal for merchants who want more detailed pricing control.
- First 100 GB charged at $0.20 = $20.00
- Next 350 GB charged at $0.15 = $52.50
- Invoice = $72.50 total
Comparison Summary
Feature |
Volume tiers |
Graduated tiers |
|---|---|---|
Rate applied to |
Entire usage based on the final tier |
Each usage segment within its own tier |
Complexity |
Simple and predictable |
More granular and accurate |
Best for |
Fixed discounts by volume |
Progressive, stepwise billing |
Example use case |
SaaS API requests, flat discount plans |
Cloud storage or utility billing by range |
Customer experience |
One flat rate after threshold |
Smooth discount curve as usage grows |
Selecting a Model
Both models serve different pricing goals. Choose the one that best fits your business logic:
- Use Volume tiers when you prefer simplicity and a single rate per billing cycle.
- Use Graduated tiers when you want to reward customers as they scale and reflect the true value of their usage.
Both models operate within Subotiz’s recurring subscription structure and can be combined with billing cycles or threshold logic for automated invoicing.
Once you understand how each model calculates charges, proceed to the Product pricing｜Configuring Tiered Pricing to create your own plan.