Why: the goal or problem

You want bulk discounts without repricing earlier usage whenever a threshold is crossed. Charge each band separately.

How: work toward a solution

A fictional workspace has three seats and 120 monthly exports. The first 100 cost 0.20 each; later exports cost 0.10 each. Thus 100 × 0.20 + 20 × 0.10 = 22. Change usage: 100 costs 20, 101 costs 20.10 and zero costs zero. Taxes, fees, refunds and tier flat fees are omitted.

Each slice keeps its own unit price.

Illustrative example

Graduated pricing

Initial workspace · 3 seats · 120 exports/month

Shared tier table
ExportsUnit price
0–1000.20
101+0.10
  1. First slice: up to 100 × 0.20
  2. Later slice: remainder × 0.10
Total22.00

100 × 0.20 + 20 × 0.10 = 22.00

Same usage with the other tier method: 12.00

No tier flat fees. Zero usage costs zero.

Fictional amounts. Taxes, fees and refunds omitted.

A fictional demo within this article. Reset or reload restores its initial state.

What: the concept

Graduated pricing prices units within each tier separately and adds the subtotals. Reaching a cheaper tier does not reprice earlier units.

Compare volume pricing using the same thresholds.

Source