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Tiered charges

Overview

Use tiered/scale pricing to create variable cost tiers (scales/intervals) impacting product unit price and provide cost benefits and incentives to shoppers to purchase large volumes. Tiered (scale) pricing configurations enable you to change the per-unit cost gradually for multiple tiers defined based on the quantities purchased.

Example for a product with a flat charge of $100:

Quantity interval Cost per unit
1 to 3 $100
3 to 6 $90
7 to 10 $80

For this example, a shopper purchasing 6 units would pay 90*6= $540 on top of the $100 flat charge, or $640 in total.

Availability

All Avangate accounts. 

Requirements

Create at least a product/subscription plan before defining pricing. 

Setup tiered (scale) charges

To add a usage component to a subscription you need to create a new pricing options group for metered resources. 

  1. Navigate to Products under Setup, search for or add/import the product you want to set usage pricing and click to edit it.
  2. Select the Pricing tab and click to Edit the Pricing configuration that will be used to define usage costs.
  3. On the editing screen of the pricing configuration, scroll down to the bottom and click on Create new pricing options group in the Pricing options groups area.
  4. Enter the Group name (Required) - this label is displayed to shoppers in the cart and is included on invoices. 
  5. Enter the Group description (Optional) - this text is displayed to shoppers in the cart and is included on invoices. 
  6. Select the type: Scale - Regular - for tiered charge.
  7. Enter a unique alphanumeric/string code (Required) - this is an identifier used in the Avangate API, product import/export and for Buy Links query parameters.
  8. Add the first scale.
  9. Specify the interval.
  10. Define impact on price per unit of tiered/metered resources (available only for products with dynamic pricing (with base price) configurations).
  11. Add - add a specific cost for each unit of tiered/metered resource in each available currency for your account. 
  12. Subtract - subtract a specific price for each unit of tiered/metered resource.
  13. Define impact on subscription lifecycle
  14. Adds - Add the desired number of months to the default billing cycle interval of a subscription. Adding one month to a monthly subscription purchased on April 22nd pushes the expiration/renewal deadline to June 22nd. 
  15. Subtracts - Subtract the desired number of months to the default billing cycle interval of a subscription. Subtracting 12 months from a 2-year subscription purchased on April 22nd 2016, pushed the expiration/renewal deadline to April 22nd 2017 instead of April 22nd 2018. 
  16. Non-recurring - Increase the lifetime of a subscription indefinitely at the moment of purchase, making it evergreen. 
  17. When you're done defining the scale usage intervals click Save groupLocalization: To localize the usage pricing options group to another market, select the desired language from the list of options available for your account and repeat the steps described above.
  18. The newly created pricing options group is available on the pricing configuration edit page. Scroll down to the bottom of the screen to identify it by the unique name you assigned to it in the Available pricing options groups area and click the Use with this product link.
  19. Hit Save to associate the usage pricing options group with the pricing configuration you're editing.

Multiple scales

Take advantage of multiple variable pricing scales/intervals for the same product. When defining the price for your offerings, you'll be able to create multiple scale pricing options groups and associate them to the same product. Once assigned to a product, the scale pricing options group contribute to generating the price of purchases, per the offering's configuration, in accordance with the options selected by the shopper.

  1. Products with With a base price configurations can feature as many scale pricing options groups as you wish. However, only the use of a single usage pricing options group is supported at this point in time.
  2. Products Without a base price configurations can feature only a single scale pricing options group and do not support the use of usage pricing options groups.

 

 

Product With a base price

Product Without a base price

Number of scale pricing options

Unlimited

1

Number of usage scale pricing options

1

Not available

 

 

Multiple scales use cases

Avangate's multiple scale capabilities can be used to create complex pricing schemas designed to control the costs paid by customers through the use of a multi-tiered charge model.

1. In the example below, a customer purchasing a single subscription for 15 seats and including 200 support calls will pay $150 + $800 on top of the offering's default price.

Product/Service

Pricing

Scale intervals

Impact on price per unit

Number of seats

1 to 10

Do nothing

11 to 50

Add $10 per unit

51 to 100

Add $8 per unit

Support calls

1 to 100

Add $5 per unit

101 to 500

Add $4 per unit

500 to 2000

Add $3 per unit

 

2. In the example below, a customer purchasing a subscription for 5 users, with a total of 200GB of storage, allowing the synching of 15 devices, will pay $450 + $1.600 + $3.450.

 

Product/Service

Pricing

Scale intervals

Impact on price per unit

Number of users

1 to 3

Add $100 per unit

4 to 10

Add $90 per unit

11 to 20

Add $80 per unit

GBs of storage used

1 to 25

Do nothing

26 to 50

Add $10 per unit

51 to 100

Add $9 per unit

101 to 500

Add $8 per unit

No. of synchronized devices

1 to 12

Add $250 per unit

13 to 29

Add $230 per unit

30 to 50

Add $200 per unit

Scale Pricing vs. Volume discounts


Unlike Volume discounts, focused exclusively on decreasing the cost per unit as the number of items added to cart increases, Scale Pricing involves multiple parameters unrelated to the actual volume of products your customers orders. Use Volume discounts to lower the price per unit for orders containing large quantities of your product.

Leverage scale pricing options to also reduce the price per unit, but in relation to variables beyond quantity, such as the number of seats/users/PCs for a single product subscription.

The two pricing options share the same core concept, namely the more customers buy the less they pay per unit, but control completely different factors, and can in fact be used in concert for the same order.

Scale pricing option parameters in Buy Links

Let's assume that you created a Users scale pricing options group with the unique code: users, and two options: 1 to 10 ($99 per user) and 11 to 50 ($88 per user).

If you want to build the Buy Link for a product using the Users scale pricing options group and charge customers for 35 users, the parameter should be formatted as such: OPTIONS=users=35, including both the unique code of the pricing options group and the specific value of the scale pricing interval.

FAQ

Can I modify scale pricing options?

All pricing scales you created are available in the Pricing options groups area under the Pricing tab for all of your products.

You can always select the Group name / label in order to access an overview of the options, and click on edit to alter the values as needed. Always make sure to save the group once you introduced modifications.

 

Can the same pricing scale be applied to different products?

Yes. But please keep in mind that the settings for a pricing scale are global, so if you edit them for one product, they will be automatically impact all others that they're associated with.

 

Can I delete a pricing scale?

No. Existing pricing group options, including scale intervals, can only be deactivated per product, and will no longer impact the price of that specific item.

Consider overhauling unused, irrelevant or obsolete pricing group options by changing all parameters including Group name, Group description, and options type, in order to obtain completely new options. Reusing older pricing options groups is as easy as editing them, and this recycling process ensures that the Pricing options groups area never gets too crowded.

 

What happens when a customer chooses a Scale interval I haven't defined?

Only the pricing intervals that you configure will be available to your customers. They won't be able to select a scale interval that has not been configured for a specific product.

 

What's the difference between Scale Pricing and Volume Discounts? 
Volume discounts are financial incentives you can offer customers that acquire large quantities of your products (multiple units). Buyers are incentivized to buy more through price discounts that increase proportionally with the volume of their order.


Scale pricing enable you to offer your customers the possibility of correlating financial incentives with product utilization, by associating the subscriptions they purchase with large numbers of users, seats, PCs, etc. The pecuniary rewards available with scale pricing extend beyond buying in bulk, to shoppers acquiring a single subscription for use by a large volume of users, or for multiple seats/PCs, etc., for example.

 

Why should I use Scale pricing and not Volume discounts?

It really depends on the customer needs you're trying to meet. With Volume discounts you can offer, let say, 20 subscriptions at a slashed price. With Scale pricing you allow them to buy a single subscriptions but for 20 users/seats. But also 20 subscriptions, each for 20 users. It's really up to you what pricing configuration to use, Avangate just makes sure you have more options in this regard than any other platform on the market.