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Pricing models

Volume pricing

A single unit price determined by total volume, applied retroactively to every unit once a threshold is crossed.

Volume pricing picks one price based on the total and applies it to everything. If 1 to 999 units cost $1 each and 1,000+ cost $0.80, a customer buying 1,000 pays $800, not $999 + $0.80.

It creates a cliff: buying the 1,000th unit makes the bill go down. That can be intentional, as an incentive to commit, but it needs to be deliberate rather than discovered when a customer notices.

Contrast tiered pricing, where each band is charged at its own rate and the total always rises with volume.

Related terms

  • Tiered pricing Unit prices that change as volume crosses thresholds, with each tier applying only to the units inside it.
  • Graduated pricing The precise name for tiered pricing where each band is charged at its own rate rather than repricing the whole quantity.
  • Usage-based pricing Charging by what the customer consumes rather than by a fixed subscription fee. Also called consumption or metered pricing.