Create a Usage-Based Product

Creating a usage-based product enables businesses to implement flexible pricing based on actual consumption. This process helps configure products that charge customers according to their usage, ensuring billing is both accurate and aligned with customer activity.

Requirements

See 📄 Create a New Product for basic guide on creating products.

Create a Usage-Based Product

To create a usage-based product:

1. Select the following

   1. Product Type = Revenue Product

   2. Revenue Type = Usage

2. Click Next Step.

   
3. In the Pricing structure dropdown menu, select one of the following options:

   1. Standard

   2. Graduated (tiered)

      1. This defines a price per unit within a range.

      2. Assuming your tiers are: Units 1-10 will be charged at $10, and Units 11+ will be charged at $5, If a customer has 11 units, the total cost will be $105 ($10 X 10 units + $5 x 1 unit)

   3. Volume (tiered)

      1. This defines one price for all units.

      2. Assuming your tiers are: Units 1-10 $10, and Units 11+ $5, If a customer has 11 units, the total cost will be $55 ($5 x 11 units)

4. Billing Period defaults to monthly.

5. Define the rates.

   1. From: The minimum usage for that tier.

   2. Up To: The maximum usage for that tier.

   3. Unit Price: The cost per unit for that tier.

   4. Flat Price: Any additional flat fee applicable for the tier.

6. Click Save Product to complete the setup.