6 Steps to Volume-Based Pricing in B2B

Volume pricing, wholesale pricing, volume discounts, or quantity discounts is a simple but powerful strategy: the more customers buy, the better the price they get on each item. It can help you increase average order value (AOV), expand your customer base, and even stand out from competitors.

The good news is that building an effective volume pricing structure for your B2B store can be fairly straightforward. In this guide, we explain how to do it in six steps. We also share the tools — such as B2B order management software, workflow approval systems, and more — that make the process even easier.

Short on time? Here’s the key takeaway:

• Volume pricing rewards larger orders. The more a customer buys, the better the price they get.
• There are several ways to set up volume pricing: tiered pricing, volume discounts, and pricing packages are all popular options.
• Before you start, take a close look at your customer data. Who are your biggest buyers? What do they typically buy in large quantities? This information is crucial for deciding your pricing tiers.
• Be clear about your rules. What purchase amounts qualify for each tier? What is the discount?
• Make sure customers know about your volume pricing. Ensure it’s easy to find on your website, in your marketing materials, and elsewhere.
• Track pricing performance. Are customers taking advantage of it? You may need to adjust things over time to get better results.

Understanding volume pricing structures

There are several ways to structure your volume pricing offers:

• Tiers: Prices are structured in different levels based on volume ranges. Each tier has a specific per-unit price that applies to all units within that tier’s quantity range.
• Thresholds: Once a certain volume threshold is reached, customers receive a discount on all units purchased. The discount applies to the entire order rather than per unit.
• Packages: Pricing in this model is based on predefined bundles or packages of products or services. Customers can choose from different package options that deliver increasing value at higher volumes.

Tiered pricing vs. volume pricing

In a tiered pricing model, the per-unit price changes depending on the volume tier. Each pricing tier has a specific wholesale price that applies to all units within that tier’s quantity range.

For example:

• Tier 1: 1-10 units at €10 per unit.
• Tier 2: 11-20 units at €9 per unit.
• Tier 3: 21+ units at €8 per unit.

In this example, if a customer buys 15 units, they’ll pay €10 each for the first 10, then €9 each for the remaining 5, for a total of €145.

With volume pricing, a single discounted price applies to all units purchased once a specific volume threshold is reached. The wholesale discount applies to the entire order rather than per unit.

For example:

• 1-10 units: No discount, regular price of €10 per unit.
• 11-20 units: 10% discount on the entire order.
• 21+ units: 20% discount on the entire order.

Setting up a B2B volume pricing system in 6 steps

Let’s look at how to build a volume pricing system for your business.

1. Analyze customer segments and purchasing patterns

Before you start offering discounts, review your customer data. Who are your biggest buyers? What do they typically buy in large quantities?

Tools such as catalog management software, order management systems, and B2B PIM software (product information management) make this easier. With a B2B PIM in particular, you can centralize all your product data, descriptions, images, pricing, and more, and see which products are most popular with your customers.

You can then use this information to offer price discounts based on purchase history or industry.

2. Define your volume pricing tiers

Next, think about how much a customer needs to buy to move to the next discount level. Make sure the savings are compelling enough to encourage them to add more products to their cart. A B2B shopping cart that can automatically calculate these tiers can help here.

3. Set qualification criteria

Then decide how customers will qualify for discounts.

You can base this on a minimum order value, either a euro amount (for example, €1,000) or a quantity of items (for example, 50 units).

Or you can offer discounts to repeat customers. You could define “repeat customers” based on a specific number of past orders (for example, at least five previous purchases) or a cumulative purchase amount over a set period (for example, €5,000 spent over the last six months).

4. Design a tiered discount structure

The next step is to decide what discount you’ll offer for each volume tier.

Of course, you still need to make a profit, so find the right balance between offering a great deal and protecting your business health. This takes time and experimentation, so keep analyzing your sales data, track your profit margins, and be ready to adjust pricing as needed to maximize results.

Let’s take an example. Suppose you sell industrial widgets that cost €75 each to produce and ship. You’ve determined that you need to sell 10 units to cover costs at a standard price of €100 per unit. To achieve a 20% profit margin on each unit, you need to sell them for €93.75 or more.

With this information, you can start testing tiered discounts while making sure you still make a profit at every level.

Expert tip: Price list software is useful here. It centralizes and manages your pricing information, ensuring consistency across channels. For the end user, workflow approval tools are handy. Junior buyers can use them to get purchase approval from senior buyers, for example.

5. Communicate your pricing options

Now it’s time to make sure your customers know about the volume pricing you offer.

Highlight this information on product detail pages, showcasing the tiered discounts or wholesale savings customers can unlock. You can also use AI-powered product description generators to easily weave these savings into compelling product copy.

In addition, you can use email marketing and newsletters to promote these offers and make sure your customers understand the benefits of buying in larger quantities.

6. Monitor and adjust

Volume pricing isn’t something you set up once and forget. Review your sales reports regularly to track the number of orders eligible for volume discounts, average order value, and the overall impact on revenue and profitability.

Run surveys or gather feedback from your sales team to assess customer satisfaction with your volume pricing structure. Are they aware of the discounts? Do they find them attractive?

You should also keep an eye on your competitors’ pricing strategies to make sure your volume discounts stay competitive and appealing.

Finally, adjust as you go to get the best results. You can change discount levels, adjust tier pricing thresholds, modify qualification criteria, or offer non-bundled discounts until you find the right structure for your business.

Expert tip: As your volume pricing strategy scales, you may see a spike in website traffic and transactions if your site is open to the public. That’s why it’s crucial to have a reliable eCommerce hosting solution that can handle these fluctuations and keep your website performing at its best for customers.

In conclusion

As a B2B eCommerce business, you could be missing out on major opportunities if you’re not using volume pricing yet. It’s a great way to increase sales, keep customers happy, and stand out from the competition.

To implement volume pricing, start by understanding your customers’ buying habits. Then design a tiered discount structure that motivates customers and works for your margins.

Define your pricing tiers and qualification criteria. Finally, communicate these offers clearly to customers, monitor their impact continuously, and adjust based on data to get the best results.

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