Volume pricing

A pricing strategy in which the price of a service or product is adjusted based on the quantity purchased.

Volume pricing is a pricing strategy in which the price of a service or product is adjusted based on the quantity purchased. Typically, as the quantity purchased increases, the price per unit decreases. This strategy is often employed by businesses to provide customers an incentive to buy more of a particular service or product to drive up sales volume.

How to add a product based on volume pricing in Zenskar

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Important

Refer the products documentation to learn more about the concept of products in Zenskar.

Step 1: Create a product based on volume pricing

  1. Navigate to Contracts > Products, and click on the ADD PRODUCT button.
  2. Select the Volume Pricing from the drop-down.
  3. Select or deselect Metered:
    1. If the service or product is metered, select the appropriate usage aggregate from the drop-down.
    2. If the service or product is not metered, enter the quantity.
  4. Fill in all other details, and select all the desired features.
  5. Save the product.

Example: metered product

Details:

  • Computing resources are being sold at:
Number of unitsPrice (USD per hour)
1-990.01
100-2000.005
201-∞0.002
  • 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.

Example: non-metered product

Details:

  • Cereals are being sold at:
Number of unitsPrice (USD per pound)
1-1001.5
101-2001.3
201-∞1.25
  • 500 units are being sold.
  • This is a non-metered product.

Step 2

Add product to new contract

  1. Navigate to Contracts > Contracts, and click on the + ADD NEW CONTRACT button.
  2. Click on the + ADD NEW PRODUCT button.
  3. Select the product(s) based on volume pricing for the contract.

Add product to new template

  1. Navigate to Contracts > Templates, and click on the + ADD NEW TEMPLATE button.
  2. Click on the + ADD NEW PRODUCT button.
  3. Select the product(s) based on volume pricing for the template.

Difference between tiered and volume pricing

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Tiered versus volume pricing

Let us assume:

  • you are in the business of selling software licenses
  • you are selling 250 licenses to a particular customer
Number of licensesPrice per unit in USD
1-100100
101-20090
201-∞80

Comparing the total cost of 250 licenses in both the models:

Number of licensesTiered pricingVolume pricing
1-100100 * 100
101-200100 * 90
201-25050 * 80250 * 80
Total2300020000

It is evident that the volume pricing strategy is more beneficial to the customers.