Tiered pricing is a pricing strategy where the cost of a product or service is set at different levels, or tiers, based on various factors such as quantity, quality, features, or customer segments.
Refer the products documentation to learn more about the concept of products in Zenskar.
- Navigate to Contracts > Products, and click on the ADD PRODUCT button.
- Select the Tiered Pricing from the drop-down.
- Select or deselect Metered:
- Fill in all other details, and select all the desired features.
- Save the product.
- Computing resources are being sold at:
|Number of units||Price (USD per hour)|
- Owing to the nature of consumption, this is a metered product.
- The usage aggregate named Compute is being used to fetch consumption details for a given billing period.
- Cereals are being sold at:
|Number of units||Price (USD per pound)|
- 500 units are being sold.
- This is a non-metered product.
Volume versus tiered pricing
Let us assume:
- you are in the business of selling software licenses
- you are selling 250 licenses to a particular customer
Number of licenses Price per unit in USD 1-100 100 101-200 90 201-∞ 80
Comparing the total cost of 250 licenses in both the models:
Number of licenses Tiered pricing Volume pricing 1-100 100 * 100 101-200 100 * 90 201-250 50 * 80 250 * 80 Total 23000 20000
It is evident that the volume pricing strategy is more beneficial to the customers.