Pricing Models
Choose your pricing model
Standard pricing
Charge a fixed recurring or one-time fee.
Example
$10 per month or $500 implementation fee
Examples: Github Copilot
Linear pricing
Charge a uniform rate for all usage events.
Example
- $0.1 per unit
- 550 units = $55.00
Examples: OpenAI - GPT-3 Davinci
Volume pricing
Offer volume discounts for higher usage and an optional flat fee per usage tier. Customers only pay the unit and flat fee in their current tier.
Example
- Tier 1: 0 - 100 units @ 1$/unit + $20 flat fee
- Tier 2: 100 - ∞ units @ $0.75/unit + $50 flat fee
Calculation for 125 units: 125 * $0.75 + $50 = $143.75
Examples: Twilio - SMS
Volume pricing (Percentage-based)
Similar to standard volume tiers, but the unit price is a percentage of a sum (e.g., total transactions). Customers only pay the percentage and flat fee in their current tier. Optionally configure a unit cap that applies to each percentage charge (e.g. 0.2% of transaction volume, capped at $5 per transaction).
Example
- Tier 1: 0 - $10000 @ 0.1% +$500 flat fee
- Tier 2: $10000- ∞ @ 0.05% + $250 flat fee
Calculation for $15000 Transaction volume: $15000 * 0.05% + $250 = $325
Examples: Stripe - Payments
Graduated pricing
Charge multiple rates for multiple tiers (similar to progressive income tax), with an optional flat fee per tier. Tiers and flat fees accumulate.
Example
- Tier 1: 0 - 100 units @ 1$/unit + $20 flat fee
- Tier 2: 100 - ∞ units @ $0.75/unit + $50 flat fee
Calculation for 125 units: 100 * $1 + $20 + 25 * $0.75 + $50 = $188.75
Examples: Amazon Web Services - S3
Graduated pricing (Percentage-based)
Similar to standard graduated tiers, but the unit price is a percentage of a sum (e.g., total transactions). Tiers and flat fees accumulate.
Example
- Tier 1: 0 - $10000 @ 0.1% +$500 flat fee
- Tier 2: $10000 - ∞ @ 0.05% + $250 flat fee
Calculation for $15000 Transaction volume: $10000 * 0.1% + $500 + $5000 * 0.05% + $250 = $875
Packaged pricing
Charge a fixed price for a package of units (similar to linear rate but with packaged quantities). Also known as stair-step pricing.
Example
Pricing: $10 per 250 units Calculation for 600 units: 3 Packages * $10 = $30