Volume pricing is a sales strategy that involves lowering the price per unit of a product as the quantity of the order increases. Volume pricing plans can be an effective way to sell more products as you entice customers to purchase a higher quantity by offering competitive rates. While the discount can be an incentive for customers to purchase larger quantities, one of the disadvantages of volume pricing is that you may end up creating a lasting expectation of lower prices for your products. 
Many companies, from e-commerce [startups](https://www.masterclass.com/articles/what-is-a-startup) to small businesses, use volume pricing methods. The product pricing model can help you: 

1. __Appeal to a wider audience__: Companies who offer a volume discount can sell to a wide range of customers, regardless of the number of units the consumer wants to purchase. You can target the audiences who have the means to purchase more units given the right incentive and the customers who might only need to purchase one or two products. If a new customer only wants a few units, they can pay the full price, while customers who want to buy in bulk can get the lower price. Opening up to both small and bulk orders widens your customer base.
2. __Offer competitive prices__: A volume discount pricing model allows you to offer low prices on large quantities and still meet your profit margin. By offering a competitive price per unit, you can draw new clients to your business and create valuable, [loyal customers](https://www.masterclass.com/articles/customer-loyalty).
3. __Sell more products__: If your business has a high volume of products, you can use a volume pricing structure to entice customers to buy larger quantities and get units off your shelves quickly. This helps you drive revenue and saves you money on the total cost of inventory storage.
In a volume pricing model, the price per unit changes depending on the number purchased; in a tiered pricing model, the cost of a unit changes based on the tiers. For example, in a tiered pricing strategy, you can offer different price points for the tiers; you can price the first one to ten units at one dollar each and the next tier of eleven to twenty units at fifty cents each. If the customer buys twenty units, the first ten will cost the set price of one dollar each, and the next ten will cost fifty cents each. 

However, in a volume pricing model, if you offer a discount based on volume, all units cost the same price. If your base price is one dollar a unit, but you offer a reduced price of fifty cents per unit when purchasing twenty or more, and the customer buys twenty units, they will pay fifty cents each—the same price for each unit.
Become a better <a href='https://masterclass.com/articles/robin-robertss-tips-for-effective-communication' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://masterclass.com/articles/robin-robertss-tips-for-effective-communication","linkCopy":"communicator","category":"automated-link"}' automatic='true'>communicator</a> with the [MasterClass Annual Membership](https://www.masterclass.com). Spend some time with Daniel Pink, author of four *New York Times* bestsellers that focus on behavioral and social sciences, and learn his tips and tricks for perfecting a <a href='https://masterclass.com/articles/daniel-pinks-tips-for-crafting-a-sales-pitch' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://masterclass.com/articles/daniel-pinks-tips-for-crafting-a-sales-pitch","linkCopy":"sales pitch","category":"automated-link"}' automatic='true'>sales pitch</a>, hacking your schedule for optimal productivity, and more. 
Volume pricing is a sales structure in which customers get a different price per unit as the quantity of the units they purchase increases or decreases. Learn more about the volume pricing model and how it can help you attract new customers.

Volume pricing is a sales structure in which customers get a different price per unit as the quantity of the units they purchase increases or decreases. Learn more about the volume pricing model and how it can help you attract new customers.

Volume Pricing Overview: 3 Benefits of Volume Pricing

Volume pricing is a sales strategy that involves lowering the price per unit of a product as the quantity of the order increases. Volume pricing plans can be an effective way to sell more products as you entice customers to purchase a higher quantity by offering competitive rates. While the discount can be an incentive for customers to purchase larger quantities, one of the disadvantages of volume pricing is that you may end up creating a lasting expectation of lower prices for your products.

Volume Pricing Definition 

Many companies, from e-commerce <a href='https://www.masterclass.com/articles/what-is-a-startup' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-is-a-startup","linkCopy":"startups","category":null}'>startups</a> to small businesses, use volume pricing methods. The product pricing model can help you: <ol class="mc-m-4"><li class="mc-my-4"> 1. Appeal to a wider audience: Companies who offer a volume discount can sell to a wide range of customers, regardless of the number of units the consumer wants to purchase. You can target the audiences who have the means to purchase more units given the right incentive and the customers who might only need to purchase one or two products. If a new customer only wants a few units, they can pay the full price, while customers who want to buy in bulk can get the lower price. Opening up to both small and bulk orders widens your customer base. </li><li class="mc-my-4"> 2. Offer competitive prices: A volume discount pricing model allows you to offer low prices on large quantities and still meet your profit margin. By offering a competitive price per unit, you can draw new clients to your business and create valuable, <a href='https://www.masterclass.com/articles/customer-loyalty' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/customer-loyalty","linkCopy":"loyal customers","category":null}'>loyal customers</a>. </li><li class="mc-my-4"> 3. Sell more products: If your business has a high volume of products, you can use a volume pricing structure to entice customers to buy larger quantities and get units off your shelves quickly. This helps you drive revenue and saves you money on the total cost of inventory storage. </li></ol>

3 Benefits of Volume Pricing

In a volume pricing model, the price per unit changes depending on the number purchased; in a tiered pricing model, the cost of a unit changes based on the tiers. For example, in a tiered pricing strategy, you can offer different price points for the tiers; you can price the first one to ten units at one dollar each and the next tier of eleven to twenty units at fifty cents each. If the customer buys twenty units, the first ten will cost the set price of one dollar each, and the next ten will cost fifty cents each. However, in a volume pricing model, if you offer a discount based on volume, all units cost the same price. If your base price is one dollar a unit, but you offer a reduced price of fifty cents per unit when purchasing twenty or more, and the customer buys twenty units, they will pay fifty cents each—the same price for each unit.

Tiered Pricing vs. Volume Pricing

Become a better <a href='https://masterclass.com/articles/robin-robertss-tips-for-effective-communication' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://masterclass.com/articles/robin-robertss-tips-for-effective-communication","linkCopy":"communicator","category":"automated-link"}' automatic='true'>communicator</a> with the <a href='https://www.masterclass.com' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com","linkCopy":"MasterClass Annual Membership","category":null}'>MasterClass Annual Membership</a>. Spend some time with Daniel Pink, author of four New York Times bestsellers that focus on behavioral and social sciences, and learn his tips and tricks for perfecting a <a href='https://masterclass.com/articles/daniel-pinks-tips-for-crafting-a-sales-pitch' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://masterclass.com/articles/daniel-pinks-tips-for-crafting-a-sales-pitch","linkCopy":"sales pitch","category":"automated-link"}' automatic='true'>sales pitch</a>, hacking your schedule for optimal productivity, and more.

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Volume pricing is a sales structure in which customers get a different price per unit as the quantity of the units they purchase increases or decreases. Learn more about the volume pricing model and how it can help you attract new customers.

Volume pricing is a sales structure in which customers get a different price per unit as the quantity of the units they purchase increases or decreases. Learn more about the volume pricing model and how it can help you attract new customers.


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Volume Pricing Overview: 3 Benefits of Volume Pricing