The following information will help you determine which pricing scheme is correct for your Component.
- Per Unit: Charge the same amount per unit
- Tiered: Charge a different per unit price
- Volume: Charge a different per unit price, but the price per unit for all units is determined by the prevailing price based on the allocated quantity
- Stairstep: Charge based on a range
We’ll use the same bracket information in the examples below to indicate how pricing can vary using different schemes.
In order to create a tiered, volume, or stairstep pricing scheme, you must define brackets.
This article is related to managing the Components in your Advanced Billing account. Components allow you to introduce additional “line items” to your products that are often expressed as “add-ons”, upsold features, or pay-per-use items. You can learn more about Coupons by checking out this help article: Components Overview.
Price Bracket Rules
- Brackets may not overlap in quantity
- Gaps in quantity are not allowed; however the lowest bracket need not start at 1
- Defining Infinity: One bracket with a blank “ending quantity” is allowed – a blank value here indicates an unbounded quantity (∞)
- Per-Unit or Per-Bracket: Prices should be given as “per unit” for per-unit, tiered, and volume pricing schemes. Prices for the stairstep pricing scheme are given as a cost for the entire bracket.
Per Unit Pricing
Simple enough. Enter a cost per unit and you’re done.
In a per-unit pricing scheme, prices are defined as per-unit costs, and all units cost the same. Thus, only 1 price bracket may be defined. If you define a component for “IP Addresses” that cost $1/each/period and a customer buys 3, then a $3 charge would be added at the end of the period.
The cost per unit can go up to 8 decimal points.
Tiered Pricing
In the tiered pricing scheme, multiple price brackets define the prices at different quantity levels. Prices are given on a per-unit basis. Your customers will pay the defined price per unit for each allocated unit. An example can illustrate this the best. Say you allow your customers to purchase extra widgets to augment their monthly plan. The pricing structure is defined as follows:
| Starting quantity | Ending quantity | Price Each |
| 1 | 10 | $2 |
| 11 | 20 | $1 |
If a customer buys 10 units, they will pay $2 per unit, for a total of $20.
If a customer buys 20 units, they will pay $2 each for the first 10 units, plus $1 each for the next 10 units, for a total of $30 (10 x $2 + 10 x $1).
Volume Pricing
In the volume pricing scheme, multiple price brackets define the prices at different quantity levels, much like in the tiered scheme. However, unlike the tiered scheme, the price per unit for all units is determined by the prevailing price for the allocated quantity. So, taking the pricing setup from the earlier example:
| Starting quantity | Ending quantity | Price Each |
| 1 | 10 | $2 |
| 11 | 20 | $1 |
If a customer buys 10 units, they will pay $2 per unit, for a total of $20.
If a customer buys 20 units, they will pay $1 per unit for all units, for a total of $20.
Stairstep Pricing
In the stairstep pricing scheme, multiple price brackets are defined, but the pricing is given as a total cost for the whole bracket instead of per unit costs. This is how Advanced Billing itself works.
| Starting quantity | Ending quantity | Price Each |
| 1 | 10 | $10 |
| 11 | 20 | $20 |
If 10 units are allocated (i.e. 10 paying customers), then the cost would be $10 total for this component.
If 20 units are allocated, then the cost would be $20 total for this component.
Please note that there is never a charge if the quantity is zero.
Quantity Settings
Quantity & metered component allocations are represented as whole numbers by default (i.e. 5 Licenses). Checking ‘Allow fractional quantities’ setting will allow you to allocate partial quantities (i.e. 4.5 Minutes). API representations of this component will return a decimal instead of an integer for the quantity values
Allow fractional quantities