Volume pricing

Concepts

Volume pricing offers a discount on a customer's entire consumption once they reach a specific level of usage. It is a powerful incentive for high-volume users: as soon as they hit a new threshold, the lower price applies to every single unit used during that billing period.

The logic of dimensions

Volume pricing is a 1-Dimensional model. It depends on one factor: Quantity (Dimension 1).

Unlike the "staircase" of tiered pricing, volume pricing works like a "Level-Up" system. Think of it as unlocking a new membership tier. Once a customer's total volume reaches a higher bracket, they unlock a better rate that applies to their total bill, not just the units within that bracket.

SaaS example: Cloud log storage

A monitoring platform charges based on the volume of logs ingested. In a volume model, the platform applies a single unit rate to the entire month's volume based on the total gigabytes (GB) stored.

Total monthly storage	Unit price
0 – 500 GB	$2.00 / GB
501 – 2,000 GB	$1.50 / GB
2,001+ GB	$1.00 / GB

The "Level-Up" Calculation: If a customer ingests 1,500 GB, they have "leveled up" into the second bracket. The entire bill is calculated using only that rate.

Tier range	Total usage	Applied unit price	Total bill
501 – 2,000 GB	1,500 GB	$1.50 / GB	$2,250

(Compare this to the Tiered (Graduated) model, where the same 1,500 GB would cost $2,500 because the first 500 GB are still billed at the higher $2.00 rate).

Get started

Create a volume product

This tutorial walks you through building a global volume template in your Product Library.

Navigate to the Library: Go to Contracts > Products.
Create a Standalone Product: Click + CREATE NEW and choose Standalone Product from the dropdown. The Create Standalone Product page will appear. Fill in the required details and click Save & Proceed at the bottom right.
Open Price Details: You will be redirected to the Price Details page. Click + Add Price to configure pricing for the product.
Select Volume Pricing Model: In the Pricing Model dropdown, select Volume Pricing.
Configure Tiers and Save: Click + Add Tier to create pricing brackets. Define the from and to ranges and enter the unit price for each tier. Continue adding tiers as needed. Once complete, click Save, then click Done on the Price Details page to finalize the setup.

How-to: Add volume pricing to a contract

1. Via Contracts

Open the target contract in Contracts > Contracts.
In the Summary tab, click + ADD PRODUCT V3.
Search for and select your configured volume pricing product.
Review Brackets: Briefly confirm the price brackets match the customer's specific agreement.
Click ADD PRODUCT. You will be redirected to the Summary page. Click Publish.

Via Customer

Open the target customer in Customers.
Go to Contracts and click + CREATE CONTRACT.
In the Summary tab, click + ADD PRODUCT V3.
Search for and select your configured volume pricing product
Click ADD PRODUCT. You will be redirected to the Summary page. Click Publish.

Reference

Technical specifications

Attribute	Specification
Dimensionality	1-Dimensional (Univariate)
Math formula	P = rᵢ × q where rᵢ = tier rate and q = total quantity
Logic type	Step function: The rate for the entire volume "jumps" to a new value at each threshold.
Boundary behavior	Lower-inclusive: A value exactly at a threshold belongs to the tier starting at that value. (Example: 10,000 is in Tier 1; 10,001 triggers Tier 2).
Calculation engine	All-in scaling: The engine identifies the single tier corresponding to total usage and applies that specific rate to every unit.
Data object	`pricing_model_type: volume_pricing`

Volume vs. tiered pricing

Both models use usage brackets, but they calculate costs differently:

Aspect	Volume	Tiered (Graduated)
Calculation Method	All units billed at the single rate of the tier reached	Each tier range billed at its respective rate
Formula	P = r(q) × q	P = (r₁ × q₁) + (r₂ × q₂) + ... + (rₙ × qₙ)
Cost Progression	Can decrease if discount overcomes volume increase	Always increases with usage
Use Case	Apply bulk pricing to entire purchase	Reward incremental volume with progressive discounts

Example: 1,500 GB with same tier structure

Tier	Rate	Volume Calculation	Tiered Calculation
0–500 GB	$2.00/GB	—	500 GB × $2.00 = $1,000
501–2,000 GB	$1.50/GB	1,500 GB × $1.50 = $2,250	1,000 GB × $1.50 = $1,500
2,001+ GB	$1.00/GB	—	0 GB × $1.00 = $0
Total		$2,250	$2,500

Hierarchical relationship between entities

In Zenskar, the volume pricing model is governed by a hierarchical relationship between entities:

Contract: The legal agreement between you and your customer.
Phase: A specific time-bound period (e.g., Q1, Implementation Phase) within that contract.
Product: The actual service or software module being sold.
Pricing model: The specific logic (volume pricing) that defines how that product is billed.

flowchart LR
    CONTRACT[Contract] ---|"has one or more"| PHASE[Phase]
    PHASE ---|"has one or more"| PRODUCT[Product]
    PRODUCT ---|"has exactly one active"| PRICINGMODEL[Pricing model]

style PRICINGMODEL fill:#90ee90