Menu
Amazon DevPay
Developer Guide (API Version 2007-12-01)

Tiered Usage-Based Pricing

You can specify an unlimited number of tiers for any of the usage-based components of your product's price. With tiered usage-based pricing, you can charge different rates according to how much your customers use. For example, if you have a product that uses Amazon S3, you could set your price so that customers pay $1 per GB-Month for the first 10 GB-Month they use, and they pay $0.90 per GB-Month for all usage above 10 GB-Month. This section discusses some of the supported pricing models and how a price change works with tiered pricing.

Note

Even if you set tiered usage-based pricing for your product, the amount you pay AWS for your customers' usage of AWS services does not change based on their usage. Exception: usage types with a tiered cost structure (for more information, see The Cost of Tiered Usage Types).

Monthly Free Usage Model

With this model, you create a pricing plan that lets you give your customers free use of a particular usage dimension each month, up to a limit you specify. This means you include no monthly or sign-up fee, and you price the first X units of the particular usage dimension at $0 per unit. Your customers still must provide a credit card number when they sign up for your product. Once they exceed the initial free usage limit during the month, they are charged the price you've set for usage above that limit.

Important

You still must pay the associated AWS costs for your customers' monthly free usage.

For example, perhaps you have an Amazon S3 product and you want to give customers 5 GB-Month free each month and then charge $3 per GB-Month for storage above that amount. The following table shows how you would set the tiers.

Price Component

Your Price

Monthly fee

$0

Sign-up fee

$0

Tiers

1. Per GB-Month of storage used (first 5 GB-Month)

$0 per GB-Month

2. Per GB-Month of storage used (over 5 GB-Month)

$3 per GB-Month

Note

This model doesn't support time-based free usage (for example, where the first month of usage is free).

A customer who signs up on the last day of the month still gets the entire amount of free usage for that first month. For example, if the customer signs up on June 30, the customer gets the free X units of free usage in June, and then gets X units of free usage again in July.

Tiered AWS Pricing

AWS uses tiered pricing for some usage types (for example, the data transfer out for Amazon S3 and Amazon EC2). We charge a certain amount for the first X TB, then a lower amount for the next Y TB, and so on.

You might want to pass on some of the AWS tiering discounts to your customers. With tiered usage-based pricing, you have the option to set your product's price to follow the AWS pricing tiers.

Important

How you can charge your customers for their use tiered usage types is different from how AWS charges you for your customers' use of them. You charge each customer based on their individual usage with your DevPay product, whereas AWS charges you based on the total usage across all the customers of your DevPay product. For more information, see The Cost of Tiered Usage Types.

Cell Phone Pricing Model

You can use tiered usage-based pricing to create a pricing plan that is similar to common cell phone pricing plans. You have a fixed monthly charge, and with that comes a certain amount of free usage. For example, perhaps you have an Amazon S3 product and you want to charge a $10 monthly fee that comes with 5 GB-Month storage. Anything above the first 5 GB-Month costs $1 per GB-Month. Therefore, you would set the monthly fee to $10 and set the first tier's price at $0 per GB-Month and its boundary at 5 GB-Month. You would then set the second tier's price at $1 per GB-Month for anything over 5 GB-Month. The following table shows how you would set the tiers.

Price Component

Your Price

Monthly fee

$10

Sign-up fee

$10

Tiers

1. Per GB-Month of storage used (first 5 GB-Month)

$0 per GB-Month

2. Per GB-Month of storage used (over 5 GB-Month)

$1 per GB-Month

Important

At sign-up, we prorate the monthly fee based on when the customer signs up during the month. Also, if a customer cancels, we refund any unused portion of the monthly fee. Be aware that if a customer signs up near the end of the month, the prorated amount might be small, but the customer can still use the first tier for free (the 5 GB-Month of storage in the preceding example). We recommend you include a one-time sign-up charge (which is non-refundable) to protect against the loss that could result if a customer signed up late in the month, quickly used the first tier for free, and then canceled use of the product before the end of the month.

You're not limited to two tiers. For example, you could still have the $10 monthly fee and the first tier set the same way as in the preceding example. But instead you could set a boundary for the second tier at 10 GB-Month, and then have a third tier where you charge $0.75 per GB-Month for any usage above 10 GB-Month. The following table shows how you would set the tiers.

Price Component

Your Price

Monthly fee

$10

Sign-up fee

$10

Tiers

1. Per GB-Month of storage used (first 5 GB-Month)

$0 per GB-Month

2. Per GB-Month of storage used (over 5 GB-Month)

$1 per GB-Month

3. Per GB-Month of storage used (over 10 GB-Month)

$0.75 per GB-Month

Note

This model doesn't support a usage limit. For example, you can't set the monthly fee at $10 and then have AWS limit your customers to using only 20 GB-Month.

Also, this model doesn't support tiered monthly pricing based on usage. For example, you can't charge $10 per month if the customer uses 5 GB-Month storage, and then $20 per month if the customer goes above 5 GB-Month or reaches some higher limit.

Price Changes with Tiered Pricing

When you do a price change for your product, you could change the prices for the existing tiers, or you could change the number of tiers. The following example shows how we charge a customer after you change the prices for the existing tiers. For information about changing your product's price, see Changing Pricing.

Note

Regardless of whether you change the pricing for the tiers or change the number of tiers, the costs you pay AWS are not affected by your price change.

In this example, you have a product that has tiered pricing for data transferred in. The boundaries between tiers occur at 10 GB and 20 GB of data transferred in. The following figure shows the tiered pricing before and after the price change.

Effect of a price change: setup

A customer uses 25 GB total: 14 GB before the price change, and 11 GB after the price change, as shown in the following image.

Effect of a price change: Customer's usage

How do we charge the customer for the usage, given the tiered pricing structure and the price change? The following figure illustrate this.

Effect of a price change: Prices charged

We charge the original tier 1 price ($0.15 per GB) for the initial 10 GB transferred in and the original tier 2 price ($0.13 per GB) for the next 4 GB. This covers the 14 GB used before the price change. After the price change, we continue with the tiered measurement, but at the new price. So we charge the new second tier price ($0.16 per GB) for 6 GB (to make the 20 GB total for the second tier), and then the new third tier price ($0.14 per GB) for the remaining 5 GB.

The customer's billing statement for the month shows usage before the price change separately from usage after the price change. For the period before the price change, the statement shows 10 GB of first-tier usage and 4 GB of second-tier usage. For the period after the price change, the statement only shows 6 GB of second-tier usage, and 5 GB of third-tier usage. Nothing is shown for the first tier.

What if your price change involves changing the number of tiers? We charge according to the old pricing scheme until the date of the change. Thereafter, we continue measuring usage, but apply the new pricing as appropriate to the usage accrued after the price change occurred. For example, let's say you change the product from having three tiers for data transferred in to having two tiers, as shown in the following figure.

Changing the number of tiers: setup

As in the preceding example, the customer uses 25 GB total: 14 GB before the price change, and 11 GB after the price change, as shown in the following image. The image also shows the original pricing scheme's tier boundaries at 10 GB and 20 GB.

Changing the number of tiers: Customer's usage

The following figure shows how we charge the customer.

Changing the number of tiers: Prices charged

We charge the original tier 1 price ($0.15 per GB) for the initial 10 GB transferred in and the original tier 2 price ($0.13 per GB) for the next 4 GB. This covers the 14 GB used before the price change. With the old pricing scheme, the 14 GB of usage puts the customer in the second tier. But with the new pricing scheme, the customer is still in the first tier. So after the price change, we charge the new first tier price ($0.18 per GB) for 1 GB (to make the 15 GB total for the new first tier boundary), and then the new second tier price ($0.16 per GB) for the remaining 10 GB.

Cancellation and Resubscription in the Same Month

If a customer cancels use of your product and then resubscribes in the same month, we don't restart the customer's usage measurements after the resubscription. Instead, we continue the usage measurements where they left off when the customer canceled. Although we consider it a separate subscription (the customer must pay any one-time sign-up fee again, etc.), for the purposes of calculating the customer's usage for the month, we treat it as the same subscription.