Tiered pricing in Zoho Billing is a pricing model where the per-unit price varies based on the quantity purchased, with different price rates applying to different quantity ranges (tiers). Critically, in tiered pricing, the price changes apply to the units in each tier separately. For example: the first 10 units cost INR 500 each, units 11-50 cost INR 400 each, and units above 50 cost INR 300 each. The total bill is the sum of each tier’s cost.
When a plan uses tiered pricing, Zoho Billing calculates the invoice by processing the quantity through each tier and summing the results. A customer subscribing to 60 units under the example above would pay: 10 x INR 500 + 40 x INR 400 + 10 x INR 300 = INR 5,000 + INR 16,000 + INR 3,000 = INR 24,000 per cycle. This calculation is automatic; the customer does not need to calculate it themselves.
The key distinction between tiered and volume pricing is how discounts are applied. In tiered pricing, different rates apply to different portions of the quantity, so lower-tier rates still apply to the first units even at high volumes. In volume pricing, the entire quantity is charged at the single rate that corresponds to the total quantity purchased. Volume pricing gives steeper discounts at high volumes but is less nuanced.
Zoho Billing allows you to define multiple pricing tiers for a plan. The practical limit on tier count is generous enough to accommodate most business pricing structures. You can define as many tier boundaries and prices as your pricing strategy requires, and the system will calculate billing across all configured tiers automatically.
When a customer changes their quantity mid-cycle on a tiered pricing plan, Zoho Billing calculates the prorated difference by determining what was already billed for the current period and what should be billed for the new quantity over the remaining days. The net adjustment appears on the next invoice as a credit or additional charge.
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