Magento Tiered Pricing: Benefits and Implementation

Magento Tiered Pricing: Benefits and Implementation

June 18, 2019

When running your e-commerce store on Magento, you’ll often think about different ways you can price your products to get the most bang from your buck (literally). But one often overlooked pricing strategy is a Magento tiered pricing strategy.

For many people, they quickly reject this pricing strategy because it often feels too complicated to set up with your own products and with Magento itself.

But it doesn’t have to be that way.

In this post, we’re going to look at what a tiered e-commerce pricing strategy is, the benefits of using it within your store as well as some great examples of stores who currently use this process.

Specifically, you’ll learn:

  1. How to implement a tiered pricing model directly into your Magento store with ease
  2. How you can use this pricing model to warrant higher profits for the same number of units sold.
  3. Why it’s important to know the core differences between volume pricing and tiered pricing.

Let’s dive right in!

What is tiered pricing

Simply put, with tiered pricing, you offer your customers a greater discount when they buy more items from you.

The more they buy, the less they pay.

This model works by establishing preset ideals for thresholds. Once a customer reaches a specific purchase quantity threshold, they then become eligible for lower pricing.

For example, if you sell socks and have a tiered pricing system in place, customers might only become eligible for this once they’ve spent a certain amount.

Another thing about flat-rate pricing is that it can very quickly alienate customers. If a customer sees your pricing and immediately decides they can’t afford it, they’re simply going to look elsewhere.

Whereas, if you use tiered pricing, it gives you the chance to further establish the value behind your product and encourage people to buy.


The truth of the matter is that it doesn’t work for all business types. It really depends on what products or services you sell.

For customers, one of the benefits of tiered pricing is the increased level of choice they have available. For sellers, it allows you to offer additional options that can increase your overall bottom line for your e-commerce business.

As an e-commerce owner, the greatest asset you can have to your disposable is regular customers. When you have a stream of consistent customers (and then consistent revenue) you’re in a much better position to know how healthy your business is and what things you might need to do in the future to improve it. Also if you’re considering raising capital from banks or investors, having increased customer lifetime value through repeat purchases is a great way to show the possibilities with your business to those who might be interested in investing in it.

It also helps you beat your competition in a competitive market. If you’re trying to offer the same products as other vendors, you should consider that you need to find a way to differentiate yourself from everyone else. Tiered pricing can be one way to do this.

Think about it. If you sell dog treats and all your competitors offer one flat pricing structure but you have a tiered pricing plan based on how many dogs you have, people who own multiple dogs might use your pricing tiers to ensure they get the best deal they can.

This pricing strategy work best where your products are seen as necessities and where the price reduction as the unit tiers go up becomes a good deal. Think about products people have to buy in order to do another thing. Those product lines work well for tiered pricing.

If you compare that to a t-shirt for consumers. Consumers don’t often need to buy multiple of the same unit and if they did they’re more likely to simply buy from a wholesaler.

So although tiered pricing isn’t very user-friendly for consumers to understand, its an effective strategy if you’re selling products that are in high demand and you want to incentivize Increased purchases.

How to implement it

Implementing tiered pricing to your Magento store is super simple. By offering a quantity discount for a specific group of customers who buy in bulk is a great way to encourage people to buy more from you each time they visit.

Within your Magento store, you’ll see the tier price shown in the catalog and also product pages.

You might’ve seen tiered pricing copy around when you’ve visited e-commerce stores yourself. How you present your pricing largely depends on what sort of brand you want to create.

For example, you might write: “but three for $75 each and save 15%.”

Implement tiered pricing to your Magento store


  1. Click catalog and then click manage products.
  2. From there select the product you’d like to use tiered pricing on.
  3. Once you’ve chosen your product select prices (this should be under your product information on the left-hand side).
  4. Under the tier price section, select “add tier” and then take the following steps:
  5. Choose the store you want the pricing to affect
  6. Choose the customer group you’d like to be eligible for the pricing tier. You can also create multiple tiers for different customer groups if you want to offer more customization.
  7. In the “Qty” field add the quantity of product that must be ordered for the discount to be applicable.
  8. In the price field, enter the desired price of the item you’d like to add tiered pricing too.
  9. Once you’ve finished all the customizations, hit save.

Difference between tiered and volume pricing

One common mistake e-commerce owners make is believing that tiered pricing and volume pricing are the same strategy.

Although both strategies are similar, there are some fundamental differences you should learn to ensure you’re using the right pricing strategy for the right type of store.

Both strategies can be used if you want to increase the number of people who spend on your store and within that, increase the amount each of those people spends.

However, there are notable differences between the two. While tiered pricing is a strategy that sets the price per unit within a specified range volume pricing defines a set price for all units within the same range.

To put it simply, when you’re dealing with tiered pricing lower price tiers draw customers in who might eventually move to higher price packages. With volume pricing, by contrast, as soon as you hit a specified number all units will now cost the lower price point.

Knowing whether or not to pick tiered or volume pricing for your optimal strategy largely depends on your stock levels and what you’re hoping to achieve with either of these strategies. Tiered pricing is much better at attracting a wider audience where customers can buy based solely on what they can afford at the time.

What’s more, if your products are good quality you might find that customers are open and willing to spend more in the future. But if your aim is to shift larger volumes of product quickly, (think excess stock) volume pricing could be the right one for you.


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