Pricing Strategies
This article is part of a series on the payments module. Sometimes you may want to have products with bulk discounts - those products are defined by adding additional products as "tiers" to a main product which is called the "base price". When you do this though, there are multiple ways that the actual price someone pays can be calculated, and we call these options pricing strategies.
Standard Tiers
The standard tiers pricing strategy is the simplest strategy and also the default. If you're not sure, just stick with this one. Using the MinQuantity, it will select the tier that the purchase quantity fits in to. Then it will multiply that tier price by the purchase quantity. If the quantity is less than the base price minimum, it will check with your site wide ProductService settings if it should be rounded to the minimum, or error. Here's a sample product:
| Tier | Unit Price | MinQuantity |
|---|---|---|
| Base Price | £1.00 | 0 |
| 10% off for 3 or more | £0.90 | 3 |
| 15% off for 10 or more | £0.85 | 10 |
Here's how the prices are computed:
| Quantity | Established tier | Total Price |
|---|---|---|
| 1 | Base Price | £1.00 |
| 2 | Base Price | £2.00 |
| 3 | 10% off for 3 or more | £2.70 |
| 4 | 10% off for 3 or more | £3.60 |
| 5 | 10% off for 3 or more | £4.50 |
| 6 | 10% off for 3 or more | £5.40 |
| 7 | 10% off for 3 or more | £6.30 |
| 8 | 10% off for 3 or more | £7.20 |
| 9 | 10% off for 3 or more | £8.10 |
| 10 | 15% off for 10 or more | £8.50 |
Note that it is possible for this strategy to have quantities where it is cheaper or equal to buy 1 more.
Step Once
Step once uses the standard tier pricing strategy except for on the base price. If the user exceeds the base price, they will be charged based on the tier price and the excess quantity. The excess quantity is the purchase quantity minus the minimum quantity of the first tier. If the quantity is less than the base price minimum, it will check with your site wide ProductService settings if it should be rounded to the minimum, or error. Here's a sample product:
| Tier | Price | MinQuantity |
|---|---|---|
| £10 for 1000GB | £0.01 | 1000 |
| 10p per GB overage | £0.10 | 1001 |
| 10% overage discount | £0.09 | 2000 |
Here's how the prices are computed:
| Quantity | Established tier | Total Price |
|---|---|---|
| 100 | Base Price (site rounded) | £10.00 |
| 500 | Base Price (site rounded) | £10.00 |
| 1000 | Base Price (site rounded) | £10.00 |
| 1001 | 10p per GB overage (excess 1) | £10.10 |
| 1500 | 10p per GB overage (excess 500) | £60.00 |
| 1999 | 10p per GB overage (excess 999) | £109.90 |
| 2000 | 10% overage discount (excess 1000) | £100 |
| 2500 | 10% overage discount (excess 1500) | £145 |
As it is using the standard tiers strategy for tiers 2 onwards, note that just like standard tiers this can also produce situations where it is cheaper to buy more which may be intentional.
