Tier pricing has become an essential way through which e-commerce ventures pursue to maximize revenues and customer relations. 

Using tier pricing for Shopify merchants will help improve the merchants’ store pages, some sales percentages, and, most importantly, the customer base. So, how do you implement this strategy?

In this detailed guide, we will take you through the practical aspects of how to use the tier price feature on your Shopify store strategically.

What is Tier Pricing?

Tier pricing, also known as segmented pricing, is another traditional pricing strategy in which a company offers a product or a service at multiple price levels based on factors such as quantity acquired, features used, or the customer category. In the Shopify spectrum, tier pricing operates as an auto-change pricing system that follows set rules and thresholds.

The model works based on the segmentation concept, where there are set various price ranges, each of which gives the customer better and better rates or other incentives as they advance up the ladder of the chosen range. For instance, a particular level might comprise simple pricing of the products for limited purchase, while the advanced levels will offer an enhanced price for increased quantities of the product. 

It thus brings about a clear value proposition that would make the customers order more.

Tier pricing, unlike conventional fixed pricing, adjusts to the behavior and purchase tendency of customers. It provides an algorithm that determines the price as a result of consumers’ behavior, for example, the number of items added to the cart or a customer’s classification in some way.

What are the differences between tier pricing and volume pricing?

It is imperative to appreciate that tier pricing and volume pricing are two different strategies employed by business organizations to influence volume purchases but are developed from diverse concepts.

Tier pricing

Tier pricing (fully known as Graduated Tier Pricing, Cumulative Tier Pricing, or Range-Based Tier Pricing) is the type of pricing technique whereby more than one price is offered depending on the amount that a customer is willing to go and buy. Each tier has a price that is set for each unit, and this price applies exclusively to each of the tiers present. For instance, if a customer purchases one hundred quantities, he/she will pay $10 for the first ten quantities and $8 for the following ten quantities. Thus, the cost found in each tier is obtained by multiplying the correct price by the number of units in that tier.

So what are its pros and cons?

Volume Pricing

Volume pricing (having other names as stepped tier pricing or discrete tier pricing), on the other hand, involves a per-unit price for all the goods bought once a specific quantity has been purchased. In this model, if a customer buys a particular quantity standard that generates a lower price, every quantity supplied to him is sold at that particular price. For instance, if a customer needs 100 units, the price reverts to $5 per unit; if the customer purchases over 50 units, all units will be sold at $5 each.

This type also has advantages and disadvantages:

To make you imagine easier, we have a comparison here:

Types of Tier Pricing

Tier pricing is a pricing strategy that business organizations will use to price a product or a service at a different level. Making sure how the tier pricing works can assist businesses in determining how their deals with clients are preferable. So, besides the Volume Pricing (or volume-based pricing) model we have analyzed above, below are some common types of tier pricing:

Feature-Based Pricing

Feature-based pricing refers to creating different tiers based on each package’s features or benefits. You will see this model is prevalent in software-as-a-service (SaaS) industries, where companies offer basic, standard, and premium versions of their products. 

Image source: EcomRise Pricing

Each tier provides varying levels of functionality, allowing your customers to choose a plan that best fits their needs and budget. You can imagine, like, a project management tool may offer basic task management features in its lowest tier, while higher tiers include advanced analytics and collaboration tools.

Subscription-Based Pricing

The case of subscription-based tier pricing is well applied in industries that depend on the regular payment model. 

Image source: Netflix

In this model, the customers receive different services at corresponding fees depending on the services or prerogatives they want. For instance, a streaming service may offer a low-priced offering with content in standard definition, but competing packages may have high definition and other options, such as offline mode. 

It is helpful for business organizations to adapt the market offer to the customers’ needs and wants while achieving constant income.

User-Based Pricing

The aspect of user-based pricing is where a particular product or service could be open to a limited number of users. This is especially common in SaaS applications where companies opt to work on a per-account basis. 

Image source: Zapier

For example, a software firm could give one price for a company with five individuals allowed to use the software and another price for a company with as many individuals as desired allowed to use the software. This versatility helps firms to accommodate expanding customer demands as they bring forth new products.

Usage-based pricing (also known as pay-per-use or consumption-based pricing)

This pricing strategy sets its prices according to the actual consumption of a good or service by the buyer. This sort of model is more useful when there is low, moderate, or high usage, such as in the case of cloud services or utility bills.

Image source: Snowflake

For instance, Cloud storage providers, along with web hosting sellers, measure customer consumption for pricing through stored gigabytes or used bandwidth. 

Image source: pCloud

Due to payment structures based on consumption, there exists enhanced satisfaction for customers who maintain loyalty to the service.

Bundled Pricing

Next, let’s explore the “Bundle Pricing.”.

In bundled pricing, multiple products or services are packaged together into different tiers at varying price points. Bundles give your customers a great deal by grouping items together, so they save money compared to buying each one on its own. 

For instance, you can see the pricing plan of "Apple One" bundles, which combine multiple Apple services into a single monthly subscription. These bundles offer significant savings compared to subscribing to each service separately:

Membership-Based Pricing

Membership-based pricing is defined as products that propose many different types of membership, where each membership is predesigned with various rates and privileges. Depending on the membership level chosen by the customer, businesses may provide the customer with access to unique materials, products, and services at reduced rates or early access to events. It also provides value to customers who are willing to be charged higher membership rates. This ensures that the clients come back.

Why Use Tier Pricing in Shopify?

Tier pricing in Shopify is a bright, customer-friendly strategy that not only drives higher sales but also enhances the overall shopping experience. Here, we will show you the incredible benefits of this strategy.

1- Boost Your Average Order Value

Image it: Your eCommerce store implements a "buy more, save more" discount promotion on the most trendy sneakers among its products. Since customers approach the next discount threshold, they develop a natural urge to purchase multiple pairs (or pairs) within their shopping cart. Amazing, right? The application of tier pricing in your store can lead customers to expend more money and increase revenue without compromising profit margins.

2- Enhance Customer Satisfaction

You know what? More and more shoppers appreciate transparency and the feeling of getting a deal.

With tier pricing, your customers know that their more significant purchase earns them extra savings—making them feel competent and valued. This added sense of empowerment can lead to repeat visits and word-of-mouth recommendations, which are gold for any online store. It's a win-win: your customers save money while you build lasting relationships.

3- Cater to Diverse Customer Segments

Different segments of buyers find use in the versatile tier pricing model. Customers seek a single product, while small business owners, together with bulk buyers, need substantial discounts on large orders. The application of a tiered pricing strategy creates an attractive shopping environment for budget shoppers and offers value to customers with bulk orders, thus expanding your business potential.

4- Streamline Inventory Management

Discount options encourage customers to purchase more quantities because they provide a discount scale. Such discounting strategies work best for products that have low seasonal demand. The rapid clearout of inventory allows you to use savings for fresh products while maintaining proper storage costs.

How to Set Up Tier Pricing on Shopify

Imagine this: You’re running your Shopify store, and you want to reward your customers for buying more—all without manually juggling endless discount codes. That’s where tiered pricing comes in, and with EcomRise, it’s as simple as it gets.

Why You’ll Love EcomRise

Shopify’s built-in discount tools are great, but they fall short when it comes to advanced pricing strategies like tiered pricing. EcomRise fills that gap by letting you effortlessly set up volume discounts that adjust automatically based on how much your customers buy. 

This means you can offer better deals for more oversized orders—encouraging shoppers to add one more item (or five) to their cart.

But that’s not all. EcomRise isn’t just about tiered pricing. It’s a complete sales-boosting toolkit that helps you with:

• Product Bundles: Create “frequently bought together” deals to nudge customers toward higher-value purchases.

• Upselling & Cross-Selling: Seamlessly integrate offers like Buy X Get Y (think BOGO or free gifts) that make your customers feel they’re truly getting a deal.

• Sales Notifications: Pop-up real-time alerts showing recent purchases to build trust and a sense of urgency.

• Trust Badges & More: Add payment badges and store policies in key spots to reassure shoppers.

• Content Protection: Keep your unique product images and texts safe from copycats by disabling right-click.

Shopify rating: 5/5 ⭐

Pricing: Free plan available. Only $9.99/month for premium plan

Customer support: Mannual doc, live chat, email.

Step-by-step guide of creating Shopify Tier Pricing with EcomRise

Step 1: Install EcomRise in the Shopify App Store; click on the Upsell & Cross Sell section on the left navigator panel, then select Volume Discount.

Step 2: Select Create offer 

Then, select any built-in layout to begin.

Step 3: Configure Your Discount Settings

Choose your discount method. You have two options:

• Shopify Function: This automatically applies the discount to every item in the cart (note you can have up to 5 automatic discounts).

• Draft Order: With this method, if a customer qualifies, a Draft Order is generated with discounted prices for checkout.

Remember, once you save the offer, you cannot change the discount method.

Next, activate your offer and set a simple, clear title. You can also add a custom block heading to grab attention.

Decide which products or collections this offer applies to.

Set up your tier prices by choosing whether you want a percentage off or a fixed discount per product and defining the required quantity for each discount level.

Specify the start and end dates, and select the action that occurs when customers click “Add to Cart” (such as redirecting to the cart, reloading the page, staying on the current page, or opening the theme cart drawer).

Step 4: Customize Your Offer’s Design

Spend a little time customizing your tier pricing outlook, like adjusting the typography, padding, color, etc.

Step 5: Add the Offer to Your Shopify page

With the product page, in your Shopify theme editor, click “Add block” to insert the volume discount offer on your product page.

You can place the block to reposition it where it fits best.

Besides your product pages, you can add the discount block to other areas like the Home or Collection pages.

Open the theme customization panel, select the page, and add the volume discount block in your desired location.

Then, choose the discount product to display.

Top Shopify Apps for Tier Pricing

High recommend: EcomRise Pro Upsell & Cross Sell 

As mentioned above, EcomRise- Pro Upsell & Cross Sell provides exceptional features that unite upsell and cross-sell functions with tier pricing structures. As a marketing solution and essential selling tool, EcomRise helps merchants boost large orders through appealing bulk savings and maintains consumer convenience in the purchase process.

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Besides EcomRise Pro Upsell & Cross Sell, we would love to introduce to you some of the Shopify apps that you should have to level up your tier pricing promotion.

1- EComposer Landing Page Builder

EComposer is the ultimate tool for elevating your tier pricing promotions. More than just a page builder, it empowers you to craft engaging, conversion-driven pages that effortlessly showcase your volume discount offers.

Highlight Features

• Live Drag-and-Drop Editor: Create landing, product, and promo pages without coding.

• Design Library: Use customizable templates to highlight your discounts.

• AI Content Generator: Instantly produce fresh content for your offers.

• Page Analytics: Monitor performance and optimize your display.

• Multiple Page Types: Build pages for any discount campaign.

Pricing

• Free

• Standard: $19/month

• Pro: $39/month

• Premium: $99/month

Rating

4.9/5 (Based on 5,000 reviews)

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2- Pumper Bundles Quantity Breaks

If you want to see your profits soar and your average order value climb, Pumper Bundles is the app for you. This friendly Shopify tool makes upselling and bundling a breeze. It lets you craft appealing product bundles and smart quantity breaks that naturally encourage your customers to add more items to their cart—often without even realizing it. Enjoy watching your sales grow as every transaction turns into a rewarding opportunity for your business.

Highlight Features

• Increase profits with upsells, bundles, and volume discounts.

• Offer discounts per unit, percentage, or flat rate.

• Use ready-made conversion-optimized templates to showcase your offers.

• Create bundles for up to three products or set specific quantity breaks.

• Monitor the impact of your bundle offers on revenue.

Pricing

• Free

• Starter: $9.99/month

• Growth: $19.99/month

• Unlimited: $39.99/month

Rating

5/5 (Based on 3,154 reviews) 

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3- Appstle℠ Subscriptions

Want to make managing subscriptions and boxes feel less like a chore and more like a breeze? Appstle Subscriptions delivers the solution custom needs to handle subscriptions effortlessly. This incredible app creates a fantastic subscription experience by solving recurring order payment issues that result in contented customers. The best part? The product operates seamlessly because of its user-friendly design, so you must wonder about your life before this technology.

Highlight Features

• Launch subscriptions and subscription boxes as a Flash with an intuitive UI.

• Automate recurring orders and streamline payments for hassle-free management.

• Simplify the purchasing process with a fast, efficient checkout experience.

• Offer personalized subscriptions and mystery boxes to drive engagement.

• Boost customer retention with loyalty features, custom shipping, and tiered discounts.

• Provide a feature-rich portal with one-click login and quick action links for easy account management.

Pricing

• Free Plan Available

• Starter: $10/month

• Business: $30/month

• Business Premium: $100/month

Rating

4.9/5 (Based on 4,223 reviews)

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4- Discountly‑POS & Tier Discount

If you want to boost sales and maximize profits with flexible discount options, Discountly‑POS & Tier Discount is the app for you. This friendly tool makes it easy to set up tiered pricing, quantity breaks, volume discounts, and even unique wholesale or VIP pricing. Perfect for significant events like BFCM, Discountly‑POS & Tier Discount automatically rewards your customers based on their order size, driving higher conversion rates and building lasting loyalty.

Highlight Features

• Offer tiered pricing, quantity breaks, volume discounts, and special pricing for wholesale or VIP customers.

• Create discount structures quickly and effortlessly.

• Manually or automatically group customers for targeted discounts.

• Generate both automatic and manual POS discounts with ease.

• Save time by managing discount rules in bulk, whether based on item quantity or order subtotal.

Pricing

• Starter: $7.99/month

• Plus: $15.99/month

• Pro: $25.49/month

• Enterprise: $49.99/month

Rating

4.9/5 (Based on 87 reviews)

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How to Shine a Spotlight on Your Shopify Tiered Pricing

You've meticulously crafted a tiered pricing strategy for your Shopify store—awesome! Now, it's time to make sure your customers actually see and understand the incredible value you're offering. Think of it like this: you've baked the most delicious cake, but now you need to entice people to take a bite. Let's explore how to make your tiered pricing irresistible and drive those conversions sky-high.

Make It Crystal Clear: Showcase Tiers with Visual Appeal

Let's be honest: walls of text can be intimidating. Instead, here are the tactics you can implement:

• Present your tiered pricing in a visually appealing and easy-to-understand format. Think clean, crisp pricing tables that highlight the benefits of each tier. 

• Use contrasting colors, bold fonts, and clear icons to draw the eye to the key differentiators. 

Remember, you want customers to instantly grasp the value proposition and be motivated to level up to a higher tier.

Actionable Tip: Consider using a Shopify app specifically designed to create beautiful pricing tables. Many offer drag-and-drop functionality and mobile responsiveness, ensuring a seamless experience for all your customers.

Highlight the Savings: Show, Don't Just Tell

Let me explain.

Don't just list the prices. You need to show your customers how much they'll save by choosing a higher tier. 

Image source: CrazyEgg

There are some common phrases you can use, like "Save up to 20%" or "Get X feature for just Y more." Please keep in mind: Quantify the benefits whenever possible. 

For example, instead of saying "Premium support," you can say, "Get priority support with a guaranteed 1-hour response time."

Personalize the Experience: Tailor Messaging to Your Audience

Generic messaging falls flat. Segment your audience and tailor your tiered pricing promotions to their specific needs and pain points. 

If you're targeting businesses, highlight the scalability and cost-effectiveness of your higher tiers. But if you're targeting individual consumers, then let’s emphasize the convenience and enhanced features.

Actionable Tip: Use Shopify's customer tagging feature to segment your audience based on their purchase history and demographics. Then, create targeted email campaigns and on-site promotions that resonate with each group.

Promote Across All Channels: A Consistent Message Drives Results

Don't limit your tiered pricing promotion to just your product pages. It's time to shout it from the rooftops (or, you know, your social media channels)! In particular, you can create engaging social media posts, run targeted ads, and include your tiered pricing benefits in your email marketing. The key you need to remember is to maintain a consistent message across all channels, reinforcing the value proposition and driving traffic to your store.

Best Practices for Tier Pricing Strategy

In the above parts, you have learned what tier pricing actually is, its benefits, and how to create it, as well as how to promote it. 

However, running a tier pricing strategy is not just setting discount values, right? Here are some actionable best practices to help you build a winning tier pricing model.          

Understand Your Audience

Every tier pricing strategy requires you to understand your customers along with their market segment.  

There are some common traits you should research and collect:

• Location: Where do they accommodate? 

• Age: What is their common age range?

• Gender: What is the probable gender of this customer?

• Interests: What interests and hobbies relate to your product?

• Education: What is the educational background of this persona? If applicable, what subjects did they focus on during their studies?

• Job title: What is their area of expertise, and what positions do they hold?

• Income: What are their income levels and purchasing capabilities?

• Relationship status: Are they single or in a relationship?

• Language: What languages do they speak?

• Favorite websites: Which sites related to your products do they visit frequently?

• Buying motivations: What drives them to purchase your products?

• Buying concerns: What obstacles might prevent them from buying?

Through content catering to global and localized tastes, Netflix delivers its entertainment products to people from different cultural backgrounds and of all ages. YouTube maintains its main appeal for people from younger audiences who use technology and like choosing their entertainment at specific times. Customers find stimulating family entertainment on Netflix, including animated features in addition to educational series, which they can view safely through parental control and child profile features.

The wide range of customer segmentation requires Netflix to develop flexible plans that customize their services according to viewer preferences and budget restrictions. Users in Brazil can access Netflix through three plan options, which include standard and premium, in addition to advertising-supported services. 

Image source: Netflix Plans and Pricing for Brazilian

Plan choices from the company enable effective entry into diverse markets to build up their customer base.

Define Clear Value Propositions

Each tier should offer a distinct, easy-to-understand value. Here are the things you should consider:

• Use straightforward language to describe the benefits and differences between each level. 

• Visual aids, like comparison charts, can simplify decision-making for your customers.

Like the tier pricing plan for Vietnamese, Netflix differentiates its tiers by offering varying video quality, the number of devices that can stream simultaneously, and access to exclusive content. This clear differentiation makes it easy for customers to choose the tier that best fits their needs. 

Image source: Netflix Plans and Pricing for Vietnamese

When customers immediately see the advantages of upgrading to a higher tier, they're more likely to do so—boosting both your average order value and customer satisfaction.

Keep It Simple

Less is often more. Limiting your tiers to a manageable number (the "rule of three" is a popular guideline) helps prevent overwhelming your customers.

For example:

• Basic/Entry Level

• Intermediate/Standard

• Premium/Advanced

Netflix primarily uses a three-tier model; some territories apply four tiers. This strategy can help their customers compare options and choose the best fit. 

The goal of a 3-tier pricing strategy is to guide customers toward the middle "best value" tier, as this is often the most profitable option for the business.

Use Data to Optimize

Once your tier pricing strategy is in place, let data be your guide. 

• Monitor key performance indicators like conversion rates, churn, and customer lifetime value to see how well your pricing tiers are performing. 

• Regular A/B testing of different pricing structures and features can reveal which elements drive higher engagement and upgrades. 

• Be ready to iterate and adjust your tiers based on real-time feedback and market trends.

Communicate Changes Clearly

Transparency is key. When you adjust your tier pricing, make sure your customers know about it well in advance. Clear communication builds trust and helps customers understand the added benefits they receive as they upgrade. Whether it's through email newsletters, website updates, or in-app notifications, keeping the conversation open will encourage customers to take advantage of new offers and improvements.

For easier imagination, let’s see how Grammarly’s doing.

Grammarly's pricing currently has three plans: Free, Pro, and Enterprise.

This platform approaches Freemium customers skillfully through email marketing. Besides promotion emails announcing the latest discounts for the Pro plan...

… They also cleverly encourage free customers to upgrade to the Pro plan in other notification emails like Weekly progress. 

Maintain Flexibility

The market and your customer base will evolve over time. Be prepared to refine your tiers as you learn more about what works best. Regularly reviewing costs, customer feedback, and competitive pricing strategies ensures that your tier pricing remains profitable and attractive. Flexibility in your pricing structure will allow you to respond quickly to changing market conditions and customer demands.

Conclusion

Tiered pricing represents a performance-boosting strategy that transforms your Shopify store operations. Your clear pricing structure produces both bigger orders from customers along sustained customer loyalty. To generate the most successful results, you need to analyze customer requirements and develop pricing systems according to their needs, which deliver benefits to both customers and your business performance. Testing different strategies with the advice gained here will help your Shopify store grow successfully.