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Incremental Quantity Based Pricing Per Product

Incremental quantity based pricing per product sets the price of one product based upon either the total quantity of that product OR the total quantity of all products in the basket. Instead of applying one price based upon the total quantity, a different price may be applied to each quantity range.

The following examples illustrate how incremental quantity based pricing is a more compelling incentive and provides more control over profit margins at each volume incentive level.

Example 1: Simple Quantity Based Price Discount
Customer receives a 20% discount on all when ordering more than 3.

Qty

Price Each 

Amount 

Cost Each 

Total Cost 

Profit $ 

Profit % 

1

5.00 

5.00 

2.50 

2.50 

2.50 

50 % 

2

5.00 

10.00 

2.50 

5.00 

5.00 

50 % 

3

5.00 

15.00 

2.50 

7.50 

7.50 

50 % 

4

4.00 

16.00 

2.50 

10.00 

6.00 

38 % 

5

4.00 

20.00 

2.50 

12.50 

7.50 

38 % 

6

4.00 

24.00 

2.50 

15.00 

9.00 

38 % 

Above is an example of a simple quantity based discount. Notice that when than 3 or more are purchased all of the products are priced at $4.00.

With Incremental Quantity Based Pricing the first 3 products are still priced at the initial value while the next level of pricing is charged in addition to the price of the first 3 products. Below is an example.

Example 2: Incremental Quantity Based Pricing
Customer receives a 20% discount on quantities above 3.

Quantity Pricing
Cart View

Qty

Price Each 

Amount 

Cost Each 

Total Cost 

Profit $ 

Profit % 

1

5.00 

5.00 

2.50 

2.50 

2.50 

50 % 

2

5.00 

10.00 

2.50 

5.00 

5.00 

50 % 

3

5.00 

15.00 

2.50 

7.50 

7.50 

50 % 

4

4.00 

*19.00 

2.50 

10.00 

9.00 

47 % 

5

4.00 

**23.00 

2.50 

12.50 

10.50 

46 % 

 

 

  *(3 at $5 each plus 1 at $4.00 each) 
**(3 at $5 each plus 2 at $4.00 each) 

 

 

In the example above you will notice that when the customer purchases more than 3 of the product(s) they are charged the $5.00 initial price for the first 3 and the $4.00 discounted price for any amount of the product(s) in addition to the first 3. The profit margin is greater than a simple quantity based pricing feature.

Example 3: Incremental Quantity Based Pricing
Customer receives a 30% discount on quantities above 3.

Qty

Price Each 

Amount 

Cost Each 

Total Cost 

Profit $ 

Profit % 

1

5.00 

5.00 

2.50 

2.50 

2.50 

50 % 

2

5.00 

10.00 

2.50 

5.00 

5.00 

50 % 

3

5.00 

15.00 

2.50 

7.50 

7.50 

50 % 

4

3.50 

*18.50 

2.50 

10.00 

8.50 

46 % 

5

3.50 

**22.00 

2.50 

12.50 

9.50 

43 % 

  

  *(3 at $5 each plus 1 at $3.50 each) 
**(3 at $5 each plus 2 at $3.50 each) 

  


Notice that even though the customer is receiving a greater discount on the product(s), when purchasing more than 3, you would still have a greater profit margin than if you were using a simple quantity based pricing as displayed in example 1. This is because the products on the first pricing level, in this example 1-3, are still charged at the initial price of the product.

Price Based Upon Quantity Of All Products In The Basket

Incremental quantity based pricing for ONE product may alternatively be based upon the quantity of ALL products in the basket. When quantity of all products is applied, the same price levels apply to the product that the pricing is set for. The only difference is that the quantity base pricing is based upon the quantity of all products instead of only the quantity of the one product that the price levels are set for.

See Also:

Incremental Quantity Based Pricing Per Product - Help Topic

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