Maximize Sales Effectively with Shopify Tiered Pricing Discounts

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Pricing plays a critical role in customers’ purchasing decisions. In fact, a recent survey by Statista revealed that for around two-thirds of U.K. consumers, price remained the most important factor when choosing what to buy. Out of over 12,000 respondents, only a combined 13% disagreed that price was the most crucial consideration.

Given the significance of pricing, many businesses are exploring tiered pricing discounts as a strategic approach. Adobe provides a compelling case study: by shifting from a one-time purchase model to a tiered subscription in 2012, the company stood out in the software market with versatile options for users (Source) . This move proved transformative, with Adobe’s annual revenue growing from $4.2B to $20B within a decade of implementation.

In this article, we’ll dive into the basics of Shopify tiered pricing discounts, provide actionable guidance on implementing tiered pricing discounts on Shopify (with and without third-party apps), and share setup tips and strategy recommendations for success.

Let’s dive in!

1. What is Shopify Tiered Pricing Discount?

Shoify Tiered pricing discounts is a sales strategy where the product or service cost decreases as the quantity purchased increases. This practice incentivizes customers to buy more by offering them higher product volumes with a better price per unit.

You will often find industries and businesses in telecommunication, e-commerce, retail, and software as a service (SaaS) use tiered pricing. For instance, SaaS subscription models usually offer different levels of service at varying price points.

Tiered pricing discounts are an effective strategy for selling products on Shopify. When customers see that they can earn more value by moving up to a higher tier, they are more likely to purchase a larger quantity of given products. This not only increases your store’s AOV but also enhances the relationship between your brand and its buyers, turning them into loyal customers.

2. Tiered Pricing vs. Volume Pricing

When activating Shopify tiered pricing, you will find the price per unit decreases at specific quantity thresholds. As a result, buyers are incentivized to purchase more items for a lower price tier.

Regarding volume discounts (quantity discounts), this sales strategy provides a percentage or fixed amount off the total price based on the total purchased quantity, instead of specific price tiers.

Here is a calculation example:

Tiered pricing	Volume discount
0-10 units = $20	0-10 units = $20
11-30 units = $10	11-30 units = $10
31+ units = $5	31+ units = $5
Total for 60 units = $550	Total for 60 units = $300

With the tiered pricing model, your total calculation would be:

($20×10) + ($10×20) + ($5×30) = $550

After completing one tier, you can move on to the next. While the total cost for volume discount is ($5×60) because 60 units fall within the 31+ units price point.

3. Benefits of using Shopify tiered pricing discounts

These are the reasons why store owners value the effectiveness of tiered pricing in their stores:

Increase Average Order Value (AOV)

Tiered pricing discounts pushes customers toward higher-priced options by offering better value at each level. When customers see the increased benefits of moving up a tier, they often spend more than originally planned.

Dropbox‘s tiered discounts strategy offers a perfect example of this success. After implementing Free, Plus, and Professional plans in 2017, they saw remarkable results within just two years. Their revenue per user jumped by 25%, while the number of paying customers increased by an impressive 70%. This approach effectively converts browsers into buyers and encourages existing customers to upgrade for additional features or benefits.

Easy Decision Making

Tiered pricing discounts simplifies purchasing decisions by presenting clear, structured choices. Each tier contains specific features and benefits, making it easier for customers to find the right option without feeling overwhelmed.

This approach directly addresses the “paradox of choice” where too many options can paralyze customers and prevent purchases. By organizing offerings into simple tiers like “Basic,” “Plus,” and “Premium,” businesses create a guided path to purchase. The customer can quickly identify which level meets their needs and budget, reducing decision fatigue and increasing conversion rates.

Enhance Customer Satisfaction

Tiered pricing gives customers a sense of control and transparency. They can select exactly what they need without paying for unnecessary features. This customization lets people match services to their unique requirements and budget, creating a more personal experience.

Netflix demonstrates this perfectly with their Basic, Standard, and Premium subscriptions. Each tier offers different features (number of screens, video quality) that match different user needs. This approach has helped Netflix achieve an impressive 93% retention rate by 2020, showing how effectively tiered pricing can boost customer satisfaction through flexibility and choice.

Upselling and Cross-selling Opportunities

Tiered pricing creates natural opportunities to upgrade customers to higher-value plans through upselling. Strategic pricing can use the “Decoy Effect” to make premium options appear more attractive.

Grammarly demonstrates this perfectly with their free version, which provides basic writing corrections but strategically limits advanced features. Users get enough value to appreciate the service but encounter limitations that highlight the benefits of upgrading. The premium features seem more reasonable when compared to the free version, encouraging users to upgrade for full functionality. This approach turns free users into paying customers without aggressive sales tactics.

Better Customer Segmentation

Tiered pricing naturally segments your customer base by their needs and spending capacity. This creates valuable data about which features matter most to different customer groups, allowing for more targeted marketing.

For example, Spotify offers Free, Individual, Duo, and Family plans to address different user needs. The free tier attracts students and casual listeners while providing valuable data. Premium tiers capture different household types and budgets. This segmentation helps Spotify deliver personalized recommendations and create marketing campaigns tailored to each group’s specific interests and usage patterns.

4. Common Types of Shopify Tiered Pricing Discounts

Volume-based Tiered Pricing

This tiered pricing strategy offers price breaks when customers purchase larger quantities. For example, customers might pay $10 per unit for 1-50 units, $8 per unit for 51-100 units, and $6 per unit for 101+ units. This encourages bulk purchases and rewards customers for buying more, directly boosting your order values and inventory turnover.

Flat Tiered Discounts (Buy More, Save More)

These tiered discounts apply set percentage reductions at specific purchase thresholds. For instance, spend $50 to save 10%, $100 to save 15%, or $150 to save 20%. The clear structure makes decision-making simple for customers while creating natural upsell opportunities at each price point, encouraging customers to add just a bit more to reach the next discount level.

💡 Read more: 4 Best Methods to Create “Buy More, Save More” Discounts on Shopify in 2025

Cumulative Spend-based Tiered Pricing

This tiered discounts model rewards total spending over time rather than single purchases. As customers reach higher spending thresholds ($500, $1,000, $5,000), they unlock better pricing permanently. This approach builds long-term customer loyalty and encourages repeat business by recognizing and rewarding your most valuable customers based on their entire relationship with your brand.

Subscription-based Tiered Pricing (Feature or Usage)

This tiered discounts model offers different subscription levels with increasing features or usage limits. Basic plans provide essential features while premium tiers unlock advanced capabilities. Alternatively, usage-based tiers might offer more storage, users, or transactions at higher levels. This flexibility lets customers start small and upgrade as their needs grow, creating a natural upgrade path.

Tiered Membership Discounts (Loyalty-based)

These tiered discounts programs reward customer loyalty with increasingly valuable benefits. Members progress through tiers (Bronze, Silver, Gold) based on purchase frequency or spending. Higher tiers receive better discounts, early access to products, or exclusive perks. This creates a compelling reason for customers to concentrate their spending with your brand rather than competitors.

Time-sensitive Tiered Discounts (Early Bird Pricing)

These tiered discounts offer better pricing for early action. Customers who purchase earlier receive better rates than those who wait. For example, conference tickets might be 30% off three months before, 15% off one month before, and full price at the door. This creates urgency, improves cash flow, and rewards decisive customers.

Product Bundle Tiered Pricing

This tiered discounts offers increasing discounts when customers purchase multiple related products together as bundles. Buying one item might be full price, two items 10% off each, and three items 15% off each. This encourages customers to purchase complete solutions rather than individual products, increasing average order value while providing better overall value to customers.

💡 Read more: How to Create Product Bundles on Shopify With & Without an App?

5. How to Create A Shopify Tiered Pricing Discount Without An App

If you want to create Shopify tiered pricing using its internal functionalities, you need to create a discount code for each tier. Eligible customers will manually enter Shopify discount codes at checkout to activate the discount.

Check out the pros and cons of this approach:

Pros:

• Cost-effective: No extra costs associated with third-party apps, making it a budget-friendly option for small stores.
• Simplicity: Setting up this discount type directly within Shopify is easy and straightforward, especially with a limited number of goods.

Cons:

• Limited features: Shopify does not include advanced functionalities such as customer segmentation or automatic discount applications like an app.
• Less flexibility: It can be challenging to implement complex discount structures or promotions that some third-party apps handle easily.
• Potential for errors: Manual setup increases the risks of errors in pricing structures, resulting in customer confusion or lost sales.

Here is the step-by-step guide on how to create Shopify tiered pricing with Shopify built-in settings

Step 1: Visit your Shopify admin dashboard > Click Create discount > Choose between “Amount off products” or “Amount off order”. In thi case, i will choose “Amount off products“.

Step 2:

Select the Discount code and give it a simple title for customers to use at checkout.

At Discount value, choose a fixed monetary value or percentage. Decide if it applies to specific products or collections, and the Purchase type should be one-time purchase, subscription, or both.

Step 3:

Set the threshold with 3 options: no requirements, minimum purchase amount, or item quantity. For Customer eligibility, select all customers, specific customer segments, or specific customers.

With Maximum discount use, limit the number of times this discount applies in total or limit it to one use per customer.

Step 4:

Regarding Combinations, decide whether this discount can be combined with others, including products, orders, and shipping.

Set the active dates for the offer, including the start and end dates for pre-scheduling.

Repeat the process with higher tiers to complete your hierarchy for Shopify tiered pricing.

6. Best Shopify App To Create Tiered Pricing Discount on Shopify

While using Shopify internal discount to set up Shopify tiered pricing is not highly recommended, you can opt for third-party apps. Such apps can provide tremendous advantages to boost your promotional efficiency, but remember to weigh both the pros and cons:

Pros:

• Advanced features: Many apps provide sophisticated features like automatic discount application or detailed analytics to enhance your pricing strategy.
• Automation: Apps can automate the discount process to reduce the need for manual adjustments and minimize errors during setup.
• Flexibility: These apps often support more complex pricing structures, such as multiple discount tiers and special conditions.
• Integration with other tools: You can explore many integrated marketing features within the apps to increase brand visibility and sales.

Cons:

• Additional costs: Most third-party apps come with subscription fees, which can be an extra factor in operation for small businesses.
• Dependence on third-party services: Relying on an external app means you are depending on its performance, updates, and potential downtime.

As one of the most trusted external apps on Shopify, BOGOS Free Gift & Bundles has assisted many merchants in enhancing their promotional campaigns with tiered pricing discounts.

Besides supporting you in creating various offers (e.g., buy X get Y, free gift with purchase, volume discounts, etc.), BOGOS can be a reliable Shopify tiered pricing app. The dynamic offer setup with 5 main conditions is accompanied by advanced targeting rules, such as customer tags or order history.

It is easy to launch hundreds of stable and scalable promotional campaigns at once and monitor them from one dashboard. The tiered offers can be configured with priority for you to stack multiple discounts during high-traffic seasons, minimizing errors and guaranteeing effectiveness.

Shopify rating: 4.9/5

Pricing: $23.99 – $79.99 per month

Developer: Secomapp

Here is step-by-step guide on how to create Shopify tiered pricing discounts using BOGOS:

Step 1: Visit your BOGOS admin dashboard > Click Create bundle and select Quantity break.

Step 2:

Give the bundle a title, block header, and block description for on-site display as a preview. Set up its active dates for pre-scheduling, including the start and end times.

Choose which option the quantity break applies to, such as all except selected products or any products.

Step 3:

Configure each discount tier as you wish for the system to trigger their conditions when the customer qualifies automatically.

Make suitable customizations to complete a profitable discount hierarchy. Add more tiers if needed.

Step 4:

The bundle discount can be combined with other active discounts, including order and shipping discounts. Save it for later activation or Publish it to run the offer instantly.

7. When to Use and Not to Use Tiered Pricing Discount Strategy For Your Shopify Store

As much as Shopify tiered pricing can benefit your e-commerce business, there are certain occasions when this discount type is not recommended. The list below suggests when this strategy works best and when it does not.

When to use

• Wholesale & B2B Sales

If your store aims for the wholesale and business-to-business segment, tiered pricing incentivizes them to purchase products in bulk. You will see a significant increase in AOV and sales revenue by driving larger orders from these customers.

• Volume based discounts for retail customers

Regarding retail shoppers, applying Shopify tiered pricing is still a great idea as they can save more money with bulk orders. Higher product quantities driven from the tactic can boost overall sales and customer satisfaction.

• Subscription based products (Online courses, Digital Goods)

Tiered pricing is ideal for online courses and digital goods with subscription offers. If they see a better monthly price, they may be motivated to commit to longer subscriptions.

• Custom Products

Customizable goods should come with tiered pricing options because different tiers can reflect various product features or customization levels.

When not to use

• High-end & Luxury products

In contrast to custom products, high-end and luxury items are often sold on perceived value rather than volume. Thus, Shopify tiered pricing may decrease the exclusivity and desirability of such goods from customers.

• One-time purchase or low repeat rate product

If your products are not regularly bought, tiered pricing may not enable enough incentive for shoppers to buy them more in one order.

• Exclusive or limited products

For products intentionally made to be exclusive or limited, you should not use tiered pricing as it can dilute their prestige and perceived value.

• Your products expire quickly

Shopify tiered pricing is not a good choice for products with a short shelf life. Bulk purchases of these items may lead to waste and customer dissatisfaction.

8. Conclusion

Shopify tiered pricing can definitely be a game changer if you know how to implement this tactic with the right tool and in suitable situations. Both approaches, with or without a third-party app, come with detailed pros and cons for your evaluation.

From there, you can choose to apply the discount type in specific occasions to maximize its effectiveness. The more you understand when and where tiered pricing should go in your Shopify store, the better it can help to increase sales revenue and conversion rates.

9. FAQs