Volume pricing

A pricing strategy where the price per unit of a product or service decreases as the quantity purchased increases. There are two techniques for shaping the price-vs-quantity curve. The first is tiered pricing — the technique borrowed from manufacturing, where the per-unit price changes in discrete steps at defined volume thresholds. In software it is structurally suboptimal because of cliff-edge negotiation behavior at tranche boundaries and revenue leakage between thresholds. The alternative is a smooth pricing surface, where the per-unit price varies smoothly with volume so every additional unit earns an incremental discount. SPP's preferred application of the smooth-surface technique is Margin-Calibrated Discounting, which tunes the surface against profitability targets and ties sales compensation to landing deals at or near the calibrated surface.