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# Pricing Model

Two fields — billingType and pricingType — combine to produce six pricing models. The examples below use tiers 1–5 = \$1, 6–10 = \$2, 11–15 = \$5 at quantity 14.

## Simple pricing

#### Flat

`FLAT_PRICE` — Fixed amount every invoice. No events needed. The simplest model — customer pays the same every period regardless of usage.

#### Unit

`UNIT_PRICE` — Price × total events reported. Simple P×Q. The most common usage-based model. Requires an event to track.

## Tiered pricing — the 2×2 matrix

Tiered pricing crosses two axes: **how the tier is applied** (pricingType: VOLUME vs TIERED) and **what it produces** (billingType: FLAT vs UNIT).

|                                       | Tier Flat (billingType: `FLAT`)                                                                                                                                 | Tier Unit (billingType: `UNIT`)                                                                                                           |
| ------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- |
| **Volume** (pricingType: `VOLUME`)    | Find the single bucket qty falls into. Charge that bucket's **flat fee once**. No multiplication.<br /><br />Qty 14 → tier 3 (11–15) → **\$5**                  | Find the single bucket qty falls into. Charge **rate × total qty**.<br /><br />Qty 14 → tier 3 rate \$5 → 14 × \$5 = **\$70**             |
| **Graduated** (pricingType: `TIERED`) | Every tier the qty passes through gets hit. Each hit tier adds its **flat fee once**. No multiplication.<br /><br />Tiers 1+2+3 all hit → \$1+\$2+\$5 = **\$8** | Every tier gets hit. Multiply **units in that tier × that tier's rate**, then sum them all.<br /><br />(5×\$1)+(5×\$2)+(4×\$5) = **\$35** |

**Key rule for tiered and unit billing:** usage-based models (billingType: `UNIT`, or pricingType: `VOLUME`/`TIERED`) should specify an event type to track.

## Example at quantity 14

| Model          | Fields                                     | Result | Calculation                                      |
| -------------- | ------------------------------------------ | ------ | ------------------------------------------------ |
| Volume flat    | billingType: `FLAT`, pricingType: `VOLUME` | \$5    | Qty 14 → tier 3 (11–15) → flat \$5               |
| Volume unit    | billingType: `UNIT`, pricingType: `VOLUME` | \$70   | Qty 14 × \$5 = \$70                              |
| Graduated flat | billingType: `FLAT`, pricingType: `TIERED` | \$8    | tier 1: +\$1, tier 2: +\$2, tier 3: +\$5 = \$8   |
| Graduated unit | billingType: `UNIT`, pricingType: `TIERED` | \$35   | (5×\$1=\$5) + (5×\$2=\$10) + (4×\$5=\$20) = \$35 |