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Oct 21, 2021 | 4 minute read

How to set up volume pricing with Elastic Path

written by Shaneil Lafayette

Volume Pricing

In the eCommerce industry, we’re always looking for ways to increase conversion rate, maximize average order value, and maintain brand loyalty. One such way that eCommerce merchandisers entice their customers to purchase a larger quantity of their products, is to employ a volume pricing strategy. In this article, we will be discussing what volume pricing is, the benefits of employing a volume pricing strategy, and how to set it up in Elastic Path Commerce Cloud.

What is Volume Pricing?

Volume pricing refers to the pricing structure that creates discounts for large quantity purchases. In this type of strategy, specific unit prices are assigned to a quantity range for a product. So this means a customer will get a discounted price per unit, based on the quantity range their purchase falls in. This essentially leads to overall higher discounts for the customer when their purchase falls in a higher quantity range. Let’s take a look at an example to better demonstrate this strategy.

Let’s say you run a home improvement business, and you have decided to apply a volume pricing strategy with the following ranges:

A customer who chooses to buy 85 units of tiles will only pay 85 x $35 = $2975; compared to 85 x $50 = $4250 that they would have been subjected to pay if volume pricing wasn’t deployed. By deploying this strategy you get the opportunity to clean out some of your inventory and make way for new products, while your customer saves $1275.

Benefits of Using Volume Pricing

Deploying a volume pricing strategy for products in your catalog can be beneficial for your business.

 It encourages customers to buy more.

When you offer volume pricing for products, it usually motivates customers to purchase higher quantities so they can receive the discount. This in turn leads to higher sales for your business.

It helps to move out inventory.

If your store still contains products that didn’t have a high demand during the season, you can deploy a volume pricing strategy to clear our expiring products or simply make way for new ones. This allows you to minimize inventory and at the same time minimize overall shipping cost as well. This type of strategy becomes specifically handy during holiday seasons like Christmas, Easter and Halloween.

It could help with converting new customers.

Offering volume pricing to new customers, could cause your business to convert more new customers compared to your competitor. As the strategy has initiated a customer’s first purchase, you will now have the opportunity to gain their regular price sales, as well as potential sales for other products as well.

It could help with maintaining customers.

Similarly to converting customers, you could also deploy the same strategy to only allow volume pricing to loyal customers. This sense of exclusivity could compel them to shop with your business rather than shopping with your competitor.

It could increase your customer base.

By offering this type of value to your customers, you could create affinity towards your brand. This could lead to more customer loyalty, as well as word of mouth marketing to your customers’ friends, enticing them to also shop at your store.


How Do I Set Up Volume Pricing With Elastic Path?

Setting up volume pricing in Elastic Path is quite simple. Here is a short demo below:

We hope this was helpful. Visit our demo library to explore other features with Elastic Path Commerce Cloud