How a product is priced decides how it is billed. A flat monthly fee needs one invoice line; usage-based pricing needs metering, rating and a way to explain the bill to the customer.
These guides take one pricing model at a time: how the price is calculated, a worked example with real numbers, where the model fits and where it causes trouble, and what it means for your invoices.
12 articles
Annual billing means one charge for 12 months, even when the price is quoted per month. Here is the discount math, the break-even month and the trade-offs.
10 min read
Six subscription model examples described from companies' own annual reports, with how each type bills its customers and what it has to get right.
10 min read
Subscription pricing models decide what a recurring bill is tied to. Three questions and a worked example show how to choose among fixed, per-unit, tiered and hybrid.
10 min read
A cost-based pricing example worked in full: a $40 variable cost and $240,000 of fixed costs become a $100 price, with markup, margin and break-even.
10 min read
Competitor-based pricing sets your price by reference to rivals. A worked example builds the benchmark, picks a position and tests it against a price cut.
10 min read
Volume discount pricing charges every unit at the rate of the tier the total reaches. A worked table shows the math and why 25 seats can cost less than 24.
10 min read
A worked value-based pricing example: price the closest alternative, add the value of the differences, then decide how much of that value to charge for.
9 min read
How freemium pricing works: where to draw the line between free and paid, how it differs from a free trial, and a worked break-even conversion example.
9 min read
Flat-rate pricing charges every customer the same fixed price for the same plan. Here is how it works, a worked margin example and when it stops working.
9 min read
Tiered pricing examples worked out in full: plan tiers, graduated tiers and volume tiers, with 1,250 units priced both ways to show the difference.
8 min read
The six main SaaS pricing models side by side, with one customer's bill worked out under each and what research says about flat versus metered bills.
10 min read
Usage-based pricing charges each customer for what they consumed in the period. Here is how usage is metered, rated and billed, with a worked bill.
10 min read
