How volume pricing works
You define quantity ranges, each with a price per unit. At billing time the total quantity picks exactly one range, and every unit is charged at that range's price. Unlike tiered pricing, there is no split: all units share one rate.
Volume pricing is common for seats and licences, where buyers negotiate on the size of the whole order and expect a single price per seat on the invoice.
Stairstep pricing is a close relative: the total quantity picks a range, and the range has one flat price instead of a rate per unit. Up to 10 seats costs $100 and up to 25 costs $200, whatever the exact number inside the range.
bill = total units × the price of the range the total falls in
Worked example
Units 1 to 100 cost $10 each, units 101 to 500 cost $8 each, and above 500 they cost $6 each. Here is what four customers pay.
- 100 units, all at $10
- $1,000
- 500 units, all at $8
- $4,000
- 501 units, all at $6
- $3,006
- 650 units, all at $6
- $3,900
One extra unit takes the bill from $4,000 down to $3,006. That drop is the volume cliff.
Why volume pricing matters
Volume pricing is simple to quote and to read: one number times one price. It gives buyers a clear reason to commit to a larger order.
It also makes your discounts explicit. Everyone at the same quantity pays the same rate, which stops each deal from inventing its own price.
Common mistakes
- Ignoring the cliff Customers just below a boundary can pay more than customers just above it. Some will buy units they do not need to reach the lower rate. That may be fine, but it should be a choice.
- Using it for usage that crosses boundaries late When usage crosses a boundary near the end of the period, the whole period reprices at once. Tiered pricing avoids that jump.
- Confusing it with tiered pricing The same rate table gives two different bills depending on which model applies. Name the model on the quote.