Digital Marketing Specialist
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!
Shoify Tiered pricing discounts are 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 at 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.
When implementing Shopify tiered discounts in your online store, choosing the right model makes all the difference. From volume-based pricing to loyalty programs, each Shopify tiered pricing approach serves different business goals and customer segments. Here are the most effective tiered discount models proven to work for e-commerce stores:
While subscription-based and usage-based tiered pricing models excel in SaaS and service businesses—where different feature sets, usage limits, or service levels can be packaged into distinct tiers—this article focuses specifically on Shopify tiered discounts strategies that drive results for physical and digital product retailers.
For more detailed information about how tiered pricing works in multiple businesses, you can read this article: Tiered Pricing 101: Definition, Examples (Excel Template Included)
The e-commerce models above leverage purchasing behavior and customer relationships unique to the Shopify ecosystem, making them particularly effective for merchants looking to scale their online stores.
While Shopify’s native discount system—free for all Shopify merchants—doesn’t directly support Shopify tiered pricing, merchants can create a basic tiered structure using multiple discount codes. This workaround involves setting up separate discount codes for each tier:
Each code has specific conditions tied to minimum quantities or spending thresholds, creating a manual version of Shopify tiered discounts.
To learn how to create a discount code for a specific tier, you can read this step-by-step guide on how to create a discount code using Shopify’s native discount feature: How to Create a Discount Code in Shopify.
✅ Pros:
❌ Cons:
Using a 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.
Below are some of the top apps you can use to implement a tiered discounts strategy in your Shopify store:
BOGOS is a comprehensive promotion app that has powered over 60,000 Shopify merchants since 2014. As an all-in-one solution for Shopify tiered pricing, BOGOS offers multiple discount types including volume discounts, bundles, BOGO deals, free gifts, and upsells—all manageable from a single dashboard. The app seamlessly integrates with your store’s checkout flow, automatically applying tiered discounts without requiring manual code entry from customers.
BOGOS provides two powerful methods for implementing Shopify tiered discounts in your store, each optimized for different merchandising strategies.
Best for single products with variants, BOGOS’s volume discount feature creates traditional Shopify tiered pricing with:
For tiered discounts across multiple products, use Mix & Match (product page widget) or Bundle Builder (dedicated landing page):
Beyond Shopify tiered pricing, BOGOS supports powerful complementary features, including free gift with purchase promotions, checkout upsells, thank you page upsells, and frequently bought together recommendations. These features work seamlessly with your tiered discount strategies to maximize average order value and customer satisfaction.
Dealeasy offers a streamlined solution for merchants seeking basic Shopify tiered pricing functionality. The app focuses on simplicity, making it easy to implement quantity-based discounts without complex configurations.
Dealeasy’s approach to Shopify tiered discounts includes:
The app also includes Mix & Match bundles and free gift promotions to complement your tiered discount strategy. However, Dealeasy prioritizes ease of use over advanced features—offering fewer configuration options and customization possibilities than comprehensive solutions like BOGOS. This makes it suitable for merchants who need quick implementation of basic Shopify tiered pricing without requiring sophisticated promotional tools.
These are the reasons why store owners value the effectiveness of tiered pricing in their stores:
Tiered pricing discounts push 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.
Tiered pricing discounts simplify 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.
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.
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.
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.
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.
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.
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.
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.
Customizable goods should come with tiered pricing options because different tiers can reflect various product features or customization levels.
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.
If your products are not regularly bought, tiered pricing may not provide enough incentive for shoppers to buy them more in one order.
For products intentionally made to be exclusive or limited, you should not use tiered pricing as it can dilute their prestige and perceived value.
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.
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.
Yes, it is. Tiered pricing can be an effective strategy for businesses to grow. It incentivizes customers to buy more by offering discounts at different pricing levels. Therefore, there are several apps specializing in Shopify tiered pricing, such as Bold Custom Pricing or Discounted Pricing. Apart from that, you can install BOGOS to take advantage of its diverse features in automating and personalizing discount offers for buyers.
While tiered pricing helps increase sales volume, you should keep track of the margin calculation to ensure it does not erode your profitability. Analyze the costs and set up your pricing strategies thoughtfully.
Usually, tiered pricing encourages larger purchases by providing perceived value through discounts, which can increase AOV, conversion rates, and customer satisfaction. Overall, your store will benefit from boosted sales and strong customer relationships.
Yes, of course. Although Shopify’s native discount does not allow customer segmentation, you can try external apps like BOGOS to divide them into groups, such as loyal members or wholesalers, for better discount customization.
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