Tiered pricing (Volume discount)
Definition
Tiered pricing is a pricing structure where the unit price drops as a customer orders a larger quantity, for example a lower price from 100 units and an even lower price from 500 units. This is a separate layer on top of any customer-specific pricing.
The more you order, the lower the unit price
Tiered pricing encourages larger orders by lowering the unit price at each volume threshold. Unlike a fixed discount, the amount changes with the quantity ordered.
Combining with customer-specific pricing
A customer can have both a negotiated base price and extra tiered discounts at larger volumes. Both layers need to be calculated correctly together in the web shop.
Practical example
A product costs 10 euros per unit below 100 units, 9 euros between 100 and 500 units, and 8 euros from 500 units. The web shop automatically shows the right price as soon as the customer adjusts the quantity.
Related terms
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