Tiered pricing with flat fee

Overview

Tiered pricing with flat fee is a pricing strategy where customers are charged a flat fee, and additional usage is billed based on the specific tier they fall into. Unlike volume-based pricing, which applies the same unit price once a certain threshold is reached, tiered pricing assigns distinct costs to each tier based on usage levels.

This approach is commonly employed in SaaS, cloud services, and subscription-based platforms, where pricing is structured in tiers to incentivize higher usage while ensuring a fair and scalable cost distribution across customers.

Example: Cloud storage

A cloud storage provider charges customers for storage based on usage tiers, with a different flat fee applied at each tier.

If a customer stores 750 GB data in a month, the total bill they have to pay is USD 448:

Create a product based on volume pricing with flat fee

Step 1

1. Navigate to Contracts > Products in the left side panel.

2. Click + CREATE NEW drop-down menu at the top right of the Products page,.

3. Select the Product menu option.

4. Fill the relevant details on the Create Product form, and click on the SAVE & PROCEED button.
5. On the Edit Product page, click on the + ADD PRICE button.
6. On the Add Price Details form, click on the Pricing Models drop-down menu, and select Tiered With Flat Fee option.

7. Create tiers by specifying the flat fee and the usage fee for each tier, as shown below.

8. Fill in all the other product details and click on the CONFIRM button.

Step 2: Assign the product to a contract or plan

• Add the product to a contract.
• Add the product to a plan.

Volume pricing with flat fee versus tiered pricing with flat fee