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Shopify Tiered Discounts: How to use Tiered Shopify Discounts for Pricing

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Shopify tiered discounts: Let’s face it, life would be a whole lot easier if you could somehow make your customers empty their wallets across your Shopify store. 

While there is no specific trick or tactic to guarantee this, there are certainly steps you can take to increase your average order value (AOV) and generate more revenue from each store visit. 

One of the best ways to get your customers to spend more is with discounts. It may sound counterintuitive – how can you make more revenue if you are selling your products for less? 

The trick is to using discounts cleverly, and really make the most of your existing customers (as they are much easier and cheaper to sell to than new customers). 

Using Shopify tiered discounts is a great way to make this happen. With tiered discounts, you can push your customers to buy more items at a greater deal. It’s not magic; it’s just psychology. Deals make people happier because they want to save more (as well as for other reasons that we will get to shortly). 

What are Shopify Tiered Discounts?

A tiered discount is a pricing strategy where sellers segment product prices to suit various target markets. Customers receive a different price when they reach certain tiers. The more items they buy, the greater the discount. 

By providing customers with multiple pricing levels, you give them an option to pay for what they can afford, and encourage them to spend up to reach the next level of savings. While this can be an effective sales strategy for one product, it’s also a great way to sell your product bundles on Shopify.

shopify tiered discounts
Source: evoeaustralia.com

For example, you may offer a single product in your store for $20. Using tiered discounts, you could offer a 10% discount for customers when they buy two of the product, or a 20% discount when they buy three of the product. It doesn’t have to be a percentage, either – you can offer a fixed-value discount such as $5 off the two-pack and $10 off the three-pack.

Tiered discounts on Shopify are discount solutions that can increase sales and revenue. Also, it rewards customer loyalty and helps make the product’s price more flexible. Offering tiered or volume discounts is an excellent sales motivation strategy. Customers get the best deal possible, while you earn more profit.

Grow your sales with high-performing deals.

Who Should Use Shopify Tiered Discounts?

The e-commerce industry is thriving, and every online business strives to grow. Offering discounts, particularly tiered discounts, is a well-known growth strategy. So, who should use Shopify tiered discounts?

Shopify tiered discounts for small/medium businesses

Tiered pricing is an excellent business model for SMBs and can help to rapidly grow your brand. This business model is also ideal for a small startup wanting to expand and grow its base of customers and is a great strategy to implement for your promotions and sales.

Shopify tiered discounts for service-based businesses

Tiered discounts are especially beneficial to service-based businesses, especially those selling digital products. With generally low overheads and high profit margins, digital products are perfect for offering in a tiered discount system (assuming it provides value to the customer) as the cost of the product is quickly recuperated. 

Shopify Tiered Discounts vs Volume Discounts

While tiered discounts and volume discounts may sound like the same concept, there are some subtle distinctions between the two. Typically, volume discounts result in the customer getting a higher discount based on the number of products they purchase. 

Shopify tiered discounts, on the other hand, may be based on the number of products purchased or the order value. For example, a customer may save $10 if they spend $100, or $25 if they spend $200. This encourages customers to not only purchase more products, but also to spend more in your store.

Shopify Tiered Discounts: Is Discounting your Products Necessary?

Many successful e-commerce stores never run discounts or promotions. Ultimately, the decision to discount your products is entirely up to you, and should be based on thorough analysis of your sales history. 

Do your customers frequently purchase cheaper products? Have you run promotions successfully in the past? If yes, using Shopify tiered discounts in your store is a great idea.

Source: fluffybuddyshop.com

A tiered pricing model will encourage shoppers to buy more to get premium services. With Shopify’s tiered discounts, you can package your offerings and sell them at different prices. It gives your customers more freedom to choose the pricing tier they are most comfortable with, and helps you move more of specific products.

Examples of Shopify Tiered Discounts

Let’s take a look at some examples of Shopify tiered discounts – use these ideas to consider how you could implement tiered pricing for certain products in your own store.

shopify tiered discounts
Source: try.pickystory.com

Looking at the picture above, there are two pricing options for this pack of shirts. Buy three and save 10%, or buy six and save 15%. The buy six option gives more value and lets the consumer save more. However, the customer isn’t locked in to that deal. If they think it is too expensive or simply don’t need that many shirts, they can opt for the lower tier.

shopify tiered discounts
Source: samarabags.com

In the example above, customers can see the dramatic increase in savings that is associated with purchasing more products. Importantly, tiered discounts don’t have to apply to single products – you can create a pack of products (choose items that are generally bought together, or somehow related) and implement this pricing structure for the kit.

Shopify Tiered Discounts vs Regular Shopify Discounts

Offering tiered discounts doesn’t just build value for customers. It brings many business advantages. The most prominent benefit is appealing to a broader range of consumers and offering greater flexibility to your customers when it comes to choosing a product pack (and associated pricing tier) they are comfortable with. 

Also, if you offer your customers valuable offerings at every level, you’ll leave less room for competitors to nudge into the market. The main advantages of tiered pricing include:

Shopify tiered discounts can help you reach a wider audience

Compared to regular discounts, Shopify tiered discounts lets you attract more buyers. You give them a chance to choose products according to what they can afford, as well as what they need. With this strategy, you can convert returning consumers into regulars by offering them convenient and flexible purchasing options. 

Boost your conversion rate

Shopify tiered discounts attract a larger number of buyers. If your pricing model meets more customer needs, your conversion rate will improve. It’s an excellent opportunity to boost sales and average order value. Thus, you can increase your bottom line by using tiered discount Shopify options and add-ons.

Stand out among your competitors

In a competitive market, you can outperform your competitors by offering tiered discounts. What’s more, your brand will be memorable for customers who are looking to purchase certain products in bulk – the ability to do this quickly and easily will win you big brownie points with your customer base. 

More control over your products

Shopify tiered discounts let you customize your offering to suit your customers, but also to suit what you’re trying to sell. If there’s a specific product (or even a specific variant) that you’re looking to move, kits can be a great way to help push that product off your shelves and into your customer’s cart. You can also group your products together into a kit, to pair fast-sellers with slower-moving products.

How to Add Shopify Tiered Discounts to your Store

With PickyStory, it’s easy to add fully customizable tiered discount deals to your store. PickyStory’s “Tiered Discounts” feature gives you a tiered discount app for Shopify and complete control over which products you add to the kit. You can create as many discount tiers as you like for a given kit, and as many kits as you like to display throughout your store.

Tiered discount deals can be shown on your product pages, your homepage, a dedicated page, or just about anywhere else you like. All the discount and pricing is handled automatically in the background by PickyStory, and inventory is synced with Shopify and tracked at SKU level.

Best Practices for Using Shopify Tiered Discounts

#1: Set your prices accordingly

Remember that lowering prices excessively for the sake of sales can hurt your bottom line. Calculate your business expenses, shipping costs, etc. to determine how much of a discount you can realistically offer.

#2: Ensure you have adequate inventory

As much as possible, your discounts should apply only to products that are in stock. Accept payments only for products you can deliver successfully, and don’t use valuable space in your store displaying deals with out-of-stock products.

#3: Consider shipping costs and charges

Make sure your discounts appropriately account for shipping costs. Encouraging your customers to buy more products is great, but also keep in mind that it will increase your costs when it comes to order fulfillment. Therefore, make sure your tiered discounts are smart and don’t undercut your shipping costs.

#4: Upsell opportunities

‍Every tier should advance to the next naturally. Knowing the function of your tiers will help you determine when and how to upsell consumers when their need changes. 

A tier-based pricing model that works for you and your customers requires research and planning, so make sure you factor in these variables before you begin.

Shopify Tiered Discounts: A Great Way to Sell More

Shopify tiered discounts can help you sell products in large amounts, and therefore increase your AOV and revenue. It’s a cheap, easy, and effective way of increasing your sales, and certainly something your business should consider investing in.

Grow your sales with high-performing deals.

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