> ## Documentation Index
> Fetch the complete documentation index at: https://docs2.zenskar.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Volume pricing

## Concepts

**Volume pricing** offers a discount on a customer's *entire* consumption once they reach a specific level of usage. It is a powerful incentive for high-volume users: as soon as they hit a new threshold, the lower price applies to every single unit used during that billing period.

### The logic of dimensions

Volume pricing is a **1-Dimensional** model. It depends on one factor: **Quantity** (Dimension 1).

Unlike the "staircase" of tiered pricing, volume pricing works like a **"Level-Up" system**. Think of it as unlocking a new membership tier. Once a customer's total volume reaches a higher bracket, they unlock a better rate that applies to their total bill, not just the units within that bracket.

### SaaS example: Cloud log storage

A monitoring platform charges based on the volume of logs ingested. In a volume model, the platform applies a single unit rate to the entire month's volume based on the total gigabytes (GB) stored.

| Total monthly storage | Unit price  |
| --------------------- | ----------- |
| **0 – 500 GB**        | \$2.00 / GB |
| **501 – 2,000 GB**    | \$1.50 / GB |
| **2,001+ GB**         | \$1.00 / GB |

**The "Level-Up" Calculation:**
If a customer ingests **1,500 GB**, they have "leveled up" into the second bracket. The entire bill is calculated using only that rate.

| Tier range         | Total usage | Applied unit price | Total bill  |
| ------------------ | ----------- | ------------------ | ----------- |
| **501 – 2,000 GB** | 1,500 GB    | \$1.50 / GB        | **\$2,250** |

*(Compare this to the **Tiered (Graduated)** model, where the same 1,500 GB would cost \*\*$2,500** because the first 500 GB are still billed at the higher $2.00 rate).*

***

## Get started

### Create a volume product

*This tutorial walks you through building a global volume template in your Product Library.*

1. **Navigate to the Library:** Go to **Contracts** > **Products**.
2. **Create a Standalone Product:** Click **+ CREATE NEW** and choose Standalone Product from the dropdown. The Create Standalone Product page will appear. Fill in the required details and click **Save & Proceed** at the bottom right.
3. **Open Price Details:** You will be redirected to the Price Details page. Click **+ Add Price** to configure pricing for the product.
4. **Select Volume Pricing Model:** In the Pricing Model dropdown, select **Volume Pricing**.
5. **Configure Tiers and Save:** Click **+ Add Tier** to create pricing brackets. Define the **from** and **to** ranges and enter the **unit price** for each tier. Continue adding tiers as needed. Once complete, click **Save**, then click **Done** on the Price Details page to finalize the setup.

***

## How-to: Add volume pricing to a contract

### 1. Via Contracts

1. Open the target contract in **Contracts** > **Contracts**.
2. In the Summary tab, click **+ ADD PRODUCT V3**.
3. Search for and select your configured volume pricing product.
4. **Review Brackets:** Briefly confirm the price brackets match the customer's specific agreement.
5. Click **ADD PRODUCT**. You will be redirected to the Summary page. Click **Publish**.

### Via Customer

1. Open the target customer in **Customers**.
2. Go to Contracts and click **+ CREATE CONTRACT**.
3. In the Summary tab, click **+ ADD PRODUCT V3**.
4. Search for and select your configured volume pricing product
5. Click **ADD PRODUCT**. You will be redirected to the Summary page. Click **Publish**.

***

## Reference

### Technical specifications

| Attribute              | Specification                                                                                                                                           |
| :--------------------- | :------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **Dimensionality**     | **1-Dimensional (Univariate)**                                                                                                                          |
| **Math formula**       | P = rᵢ × q where rᵢ = tier rate and q = total quantity                                                                                                  |
| **Logic type**         | **Step function**: The rate for the entire volume "jumps" to a new value at each threshold.                                                             |
| **Boundary behavior**  | **Lower-inclusive**: A value exactly at a threshold belongs to the tier starting at that value. (Example: 10,000 is in Tier 1; 10,001 triggers Tier 2). |
| **Calculation engine** | **All-in scaling**: The engine identifies the single tier corresponding to total usage and applies that specific rate to every unit.                    |
| **Data object**        | `pricing_model_type: volume_pricing`                                                                                                                    |

### Volume vs. tiered pricing

Both models use usage brackets, but they calculate costs differently:

| Aspect                 | Volume                                                  | Tiered (Graduated)                                   |
| ---------------------- | ------------------------------------------------------- | ---------------------------------------------------- |
| **Calculation Method** | All units billed at the single rate of the tier reached | Each tier range billed at its respective rate        |
| **Formula**            | P = r(q) × q                                            | P = (r₁ × q₁) + (r₂ × q₂) + ... + (rₙ × qₙ)          |
| **Cost Progression**   | Can decrease if discount overcomes volume increase      | Always increases with usage                          |
| **Use Case**           | Apply bulk pricing to entire purchase                   | Reward incremental volume with progressive discounts |

**Example: 1,500 GB with same tier structure**

| Tier         | Rate      | Volume Calculation        | Tiered Calculation        |
| ------------ | --------- | ------------------------- | ------------------------- |
| 0–500 GB     | \$2.00/GB | —                         | 500 GB × $2.00 = $1,000   |
| 501–2,000 GB | \$1.50/GB | 1,500 GB × $1.50 = $2,250 | 1,000 GB × $1.50 = $1,500 |
| 2,001+ GB    | \$1.00/GB | —                         | 0 GB × $1.00 = $0         |
| **Total**    |           | **\$2,250**               | **\$2,500**               |

### Hierarchical relationship between entities

In Zenskar, the volume pricing model is governed by a hierarchical relationship between entities:

* **Contract:** The legal agreement between you and your customer.
* **Phase:** A specific time-bound period (e.g., Q1, Implementation Phase) within that contract.
* **Product:** The actual service or software module being sold.
* **Pricing model:** The specific logic (volume pricing) that defines how that product is billed.

```mermaid theme={null}
flowchart LR
    CONTRACT[Contract] ---|"has one or more"| PHASE[Phase]
    PHASE ---|"has one or more"| PRODUCT[Product]
    PRODUCT ---|"has exactly one active"| PRICINGMODEL[Pricing model]

style PRICINGMODEL fill:#90ee90
```