Tiered pricing in Subotiz allows merchants to set different unit prices across usage ranges within a billing cycle. Charges are calculated automatically based on actual usage, with both Volume pricing, Graduated pricing, and usage-based billing supported.
Choosing a Pricing Method
When configuring usage-based pricing, choose a pricing method based on how you want charges to scale with usage.
- Use Volume pricing: Apply a single unit price to all usage once a customer reaches a specific usage tier. Ideal for simple, discount-based pricing (e.g., API usage plans).
- Use Graduated pricing: Apply different unit prices across usage ranges. Ideal for gradually decreasing pricing as usage increases (e.g., cloud storage).
- Quick guide: Choose Volume pricing for simplicity and predictable pricing. Choose Graduated pricing for more granular, usage-based discounts.
Tiered Pricing Overview
- Volume Pricing
Volume pricing determines a single unit price based on the total usage tier, and applies that price to all usage.
Key characteristics:
- A single discounted price applies once a threshold is reached
- Simple and easy to estimate
Example pricing structure:
Tier |
Usage Range (GB) |
Price |
|---|---|---|
Tier 1 |
0–100 GB |
$0.20 / GB |
Tier 2 |
101–500 GB |
$0.15 / GB |
Tier 3 |
501+ GB |
$0.10 / GB |
Example:
If a customer uses 450 GB in a billing cycle:
- Usage falls into Tier 2 (101–500 GB)
- All 450 GB are billed at $0.15
- Total = 450 × $0.15 = $67.50
- Graduated Pricing
Graduated pricing calculates charges across each usage range, applying the corresponding price to each portion of usage.
Key characteristics:
- Unit price decreases as usage increases
- More precise and usage-based pricing
Example pricing structure:
Tier |
Usage Range (GB) |
Price |
|---|---|---|
Tier 1 |
0–100 GB |
$0.20 / GB |
Tier 2 |
101–500 GB |
$0.15 / GB |
Tier 3 |
501+ GB |
$0.10 / GB |
Example:
If a customer uses 450 GB in a billing cycle:
- First 100 GB at $0.20 = $20.00
- Next 350 GB at $0.15 = $52.50
- Total = $72.50
Pricing Model Comparison
Criteria |
Volume Pricing |
Graduated Pricing |
|---|---|---|
Pricing logic |
Single rate based on final tier |
Split across usage tiers |
Pricing behavior |
Discount applies to all usage |
Price decreases progressively |
Complexity |
Simple |
More granular |
Best for |
Flat discount models |
Progressive pricing strategies |
Common use cases |
API plans, fixed discount pricing |
Cloud storage, resource usage |
Customer experience |
Single rate |
Gradual price reduction |
Use Cases and Business Value
Tiered pricing helps merchants:
- Optimize pricing structure: Adjust pricing across different usage levels.
- Increase usage: Encourage higher consumption with pricing incentives.
- Automate billing: Handle complex pricing rules within subscription cycles.
Common use cases include:
- Cloud storage services
- SaaS API usage
- Digital content subscriptions
- Resource or consumption-based products
Tiered pricing provides a flexible approach to usage-based billing. By choosing the right pricing method, merchants can automate billing, improve pricing strategy, and better align charges with customer usage.
After setting up your pricing logic, go to Product pricing｜Configuring Tiered Pricing to create and apply your pricing plan.