Price Model

Price model to calculate the cost of a product or service.

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Price Model

Basic pricing

In a basic price model, each unit of a Billable Metric is assigned a fixed cost.

Example:

Consider a company offering cloud storage services at a rate of $0.5 per gigabyte (GB).

In this scenario, the per unit is set to $0.5 for Billable Metric "per gigabyte", indicating that each GB costs $0.5.

For 10 units, 10 x 0.5(unit amount) = 5, $5 in total.

Tiered pricing

In tiered pricing, the cost of a given unit depends on the tier range that it falls into, defined by upper and lower bounds.

For example, the first 5 GB costs $0.5 each with $10 flat fee, 6-10 GB costs $0.3 each with $5 flat fee, and all subsequent GBs cost $0.2 each with no flat fee.

Example:

1. For 4 units:

• Calculated as 4 x 0.5 + 10 = 12, $12 in total.

2. For 8 units:

• Calculated as (5 x 0.5 + 10) + (3 x 0.3 + 5) = 18.8, $18.8 in total.

3. For 15 units:

• Calculated as (5 x 0.5 + 10) + (5 * 0.3 + 5) + (5 * 0.2) = 20, $20 in total.

Bulk pricing

With bulk pricing, units are charged in fixed bundles (referred to as bulk sizes).

For instance, if the bulk size is set to 5:

• Purchasing 4 units will be billed as a bundle of 5.

• Purchasing 6 units will be billed as 2 bundles of 5.

Example:

1. For 4 units:

• Calculated as 1 bulk (5 units) × $5 = $5 total.

2. For 6 units:

• Calculated as 2 bulks (10 units) × $5 = $10 total.

Volume pricing

In volume pricing, the total number of units purchased determines the cost per unit for all units.

Example:

1. If you purchase 8 units, the total cost is calculated as:

• 8 * 0.5 (unit price) + 5 (flat fee) = $9 in total.

2. If you purchase 15 units (more than 10), the total cost is calculated as:

• 15 * 0.4 (unit price) + 0 (flat fee) = $6 in total.

Percentage pricing

Percentage pricing applies a rate per event based on a percentage of the value in the event. For example, for a payment event, it is calculated as a percentage of the transaction value.

Example:

1. For a transaction of $100, the total charge is calculated as:

• 100 * 0.25 (percentage rate) + 3 (flat fee) = $28 in total.

Tiered percentage pricing

Tiered percentage pricing applies a per event rate based on a percentage of the value in the event., with different rates for specified tiers.

Example:

If the pricing is set as follows:

1. For a payment of 9 units, Calculation:

• 9 * 0.25 (percentage rate) + 3 (flat fee) = $5.25 in total.

2. For a payment of 20 units, Calculation:

• 10 * 0.25 (percentage rate) + 3 (flat fee) + 10 * 0.20(percentage rate) + 1 (flat fee) = $8.50 in total.

Matrix pricing

Matrix pricing determines the cost based on combinations of two or more properties.

Example:

If the pricing is set as follows:

The pricing config can be represented in the following table:

Property 1	Property 2	Price per Unit ($)
partner = aws	region = us-east-1	$0.50
partner = aws	region = us-west-1	$0.30
partner = gcp	-	$0.40
Default price	-	$0.20

In this example, the price is calculated based on the specific property combinations. If no combination matches, the default price of $0.20 applies.