5 Best Practices for WooCommerce Tiered Pricing Strategy


The pricing model plays a pivotal role in sales for a WooCommerce business. If you run a wholesale business, you may lean towards volume pricing. However, you have many reasons to consider using a tiered pricing strategy.

Tiered pricing helps businesses establish a sophisticated and successful business model for both the company and its customers. You can gain a competitive advantage over your competitors by catering to your customer base based on a few factors.

This blog will discuss WooCommerce tiered pricing best practices and explain how it is different from volume pricing. We’ll also look at its advantages and look at some examples of tiered pricing. Let’s dive in!

What is Tiered Pricing?

Tiered pricing is a form of fee structure where businesses can offer multiple levels of products or services for varying pricing. For instance, some software organizations may offer basic features at a low-rate tier and advanced features at high-rate tiers with additional costs. If you run a wholesale e-commerce business, you can offer discounts for bulk orders based on the frequency of orders.

A tiered pricing strategy is often used in competitive markets with multiple players where businesses wish to differentiate their offerings from each other through more advanced services at relatively higher prices. The other famous pricing model is volume pricing.

The tiered pricing model offers different features or service levels for buyers at different price points. On the other hand, volume pricing involves changing prices based on how often or how big an order is.

Why Use a Tiered Pricing Strategy?

  • It is an effective way to target various kinds of customers based on their budget constraints and requirements.
  • It can be a fruitful strategy for growing the customer base.
  • Tiered pricing can drive up revenues.
  • It can be used to encourage customers to move up to the higher tiers with evolving needs.

Tiered pricing helps better manage your costs by enabling you to offer more features to those who are willing to pay. You can put your plan into action with the help of b2b tier pricing plugins like the WooCommerce wholesale suite.

WooCommerce Tiered Pricing Strategy Best Practices

If you’re thinking of implementing tiered pricing for your eCommerce business, there are a few aspects to remember. The following are some of the tiered pricing strategy best practices to consider.

1. Define each tier precisely.

It’s essential to clearly state multiple tiers and what each tier offers regarding service or features. The best practice is to create a separate tier for every customer persona. With a persona-based approach, you can customize the tiers based on the major pain points of every customer type.

Moreover, make sure you clearly communicate the benefits and features of each tier to your buyers. This is key to ensuring they can make informed decisions about which one is right for them. Making each tier clear can help customers better understand the value of buying from a higher tier.

2. Set pricing that is in line with the value.

During the price setting of tiers, it’s necessary to consider each tier’s value. You will need to ensure your prices precisely reflect that value. For instance, if the price of Tier B is doubled that of Tier A, the upgrade should be a noticeable one that justifies the cost hike.

3. Keep track of customer usage patterns.

The tiered pricing best practice asks you to closely monitor the client usage patterns to ensure your pricing tiers are sustainable over the period. If you observe that one tier is significantly more responsive than the others, consider what obstacles make customers hesitant to subscribe to the other tier. For example, low popularity can be due to too high pricing for the amount of value compared to the benefits.

On the flip side, close observation of customer usage patterns can provide insight into what is working. You may assess your successful tiers to better understand what your clients value most and what you can replicate in other areas.

4. Examples of Tiered Pricing

There are a few different ways eCommerce businesses can structure their tiered pricing for wholesale buyers. One example could be offering discounts for bulk orders. Assume you want to create a percentage discount based on quantity-based tiers. You can apply it to your user, product, or category settings. Also, you can choose the wholesale role to add the wholesale discount and start and end quantities.

Another best practice for tiered pricing is setting different prices per order frequency. You can offer a discounted rate to buyers who place regular bulk orders. Discounts can be an incentive for customers and help you set up a regular schedule for them to buy from you.

Also, you can provide additional features or services at higher tiers. For instance, you can offer free or discounted delivery charges on higher tier levels.

5. Implement a pricing strategy based on competition.

Competition-based pricing uses competitors’ pricing data for similar products. It helps to set a base price for their products. This pricing strategy heavily relies on market data instead of focusing on production costs or the item’s value.

Think like this. You have three competitors offering the same product as yours. You categorize them from the high-end to the affordable brands. Now, you decide where you fit in.

What is the perfect situation for using competition-based pricing?

The reason organizations rely on competition-based pricing is straightforward. Also, you have full control over your market position. Information about your competitors’ markets can give you more than just pricing information, which you can use to get similar results.

Competitive pricing is a useful tool for small businesses and retailers, especially in e-commerce.

Last Word

B2B Woocommerce developers can also help you out in implementing tiered pricing strategy best practices and once implemented  it can be an effective way to scale revenue and improve your b2b customer targeting. If executed right, it can help grow the business while keeping costs down. But before using a tiered pricing strategy, it’s important to think about all of the factors involved.

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