Pricing Models and Modifiers
Pricing models and pricing modifiers are available when building a pricing strategy in NetSuite SuiteBilling.
See the following topics for information about structuring your pricing:
See the SuiteBilling help topic Creating Price Plans for information about how to create price plans using SuiteBilling.
Pricing Models
Pricing models let you structure pricing based on the number of items sold. Regardless of the pricing model configured in the price plan, Commerce web stores calculate and display the total price on the page.
Subscriptions provide two pricing models:
-
Tiered Pricing
-
Volume Pricing
The differences between the two pricing models are described below. The examples use the same number of items being purchased to illustrate how each of these two models results in different total customer costs.
Tiered Pricing
With tiered pricing, each item is billed according to its price tier, regardless of the total number of items sold. Do not mix different types of tiers on the same subscription line. The subscription line details page only displays the minimum of the first tier and the maximum of the last tier. The subscription line summary displays intermediate tiers. Best practice is to not set a minimum or maximum on intermediate tiers.
Tiered Pricing Example
|
Tier |
Item Count |
Cost per Item |
|
Tier 1 |
1 - 10 |
$3.00 |
|
Tier 2 |
11 - 20 |
$2.80 |
|
Tier 3 |
Over 20 |
$2.50 |
For this example, the account is set up with three pricing tiers and the customer is purchasing 40 items.
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The first 10 items are in Tier 1 and are charged at the Tier 1 rate of $3.00 each.
-
The second 10 items (items 11 through 20) are in Tier 2 and are charged at the Tier 2 rate of $2.80 each.
-
The remaining 20 items (items 21 through 40) are in Tier 3 and are charged at the Tier 3 rate of $2.50 each.
Therefore, the total net revenue impact for the 40 items is:
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10 items at $3.00/each = $30.00
-
10 items at $2.80/each = $28.00
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20 items at $2.50/each = $50.00
-
Total of all items = $108.00
Volume Pricing
With volume pricing, the entire number of items are billed at the same price based on the number of items being ordered. Minimum and maximums do not display for fixed subscription lines. Best practice is to not set minimums or maximums on fixed subscription lines.
Volume Pricing Example
|
Volume Level |
Items Ordered |
Cost per item at this volume level |
|
Volume Level 1 |
1 - 10 |
$3.00 |
|
Volume Level 2 |
11 - 20 |
$2.80 |
|
Volume Level 3 |
Over 20 |
$2.50 |
For this example, the customer purchases 40 items. Using the previous table, Volume Level 3 applies. Therefore, each of the 40 items will be charged at a rate of $2.50 for a total of $100.00.
Pricing Modifiers
SuiteBilling Subscriptions provides two pricing modifiers:
These modifiers can be combined with different pricing models, such as Tiered and Volume, to provide additional savings (and volume purchase incentives) for your customers.
Subscriptions for Commerce websites supports the combinations of pricing models and pricing modifiers shown below.
|
|
Tiered Pricing Model |
Volume Pricing Model |
No Pricing Model |
|
Discount Pricing Modifier |
X |
X |
X |
|
Usage Pricing Modifier |
|
|
X |
Discount Pricing Modifiers
Discount pricing modifiers structure discounts based on the total net amount of the purchase. These discounts are expressed as a percentage off the total purchase amount.
Example:
-
Total Amount: $95.00
-
Discount: 10%
-
Calculated value of the discount ($95.00 * 10%) = $9.50
-
Total amount after discounts ($95.00 - $9.50) = $85.50
Usage Pricing Modifiers
Usage Pricing Modifiers do not directly change the total price, but they change how the price is shown in Commerce websites. Since the total amount is based on how much a service is used, the total is not known prior to billing. For example, if you charge $5.00 per megabyte used per month, the total is not known until the end of the service period.