B2B Pricing Strategy: Seven Models and Who Each One Suits

Quick Answer

The seven models are cost-plus, pricing based on cost plus markup, tiered, grouping buyers into discount brackets, negotiated, individually set rates, value-based, pricing tied to buyer outcomes, competitive, pricing relative to market rates, volume-based, discounts scaling with order size, and contract or subscription, a fixed recurring arrangement. Wholesale Pricing Discount B2B directly supports tiered, negotiated, and volume-based models through customer tags, quantity breaks, and custom price overrides.

Short Intro

B2B pricing strategy is not one single approach, and businesses often default to whichever model they encountered first rather than considering whether a different one might actually fit their situation better.

Seven models come up repeatedly across B2B pricing conversations, cost-plus, tiered, negotiated, value-based, competitive, volume-based, and contract or subscription pricing, and each fits a different combination of product type, buyer relationship, and market position.

This guide surveys all seven models and offers guidance on which situation each one tends to suit best.

What Are the Seven B2B Pricing Strategy Models?

B2B businesses use different pricing models depending on their costs, customers, order sizes, and sales agreements. The right model can help you protect margins while giving business buyers pricing that matches their purchasing behavior and relationship with your company.

Here are seven common B2B pricing strategy models:

1. Cost-Plus Pricing

Cost-plus pricing starts with the cost of producing or supplying a product and adds a fixed markup. For example, if a product costs $50 and you apply a 30% markup, the selling price is $65.

This model is simple to calculate and makes it easier to maintain a predictable margin. It works well when your costs are relatively stable, but it does not account for differences in customer value or what buyers are willing to pay.

Best for: Businesses with predictable costs and straightforward product margins.

2. Tiered Pricing

Tiered pricing gives customers different prices based on predefined customer groups, order values, or purchasing levels. For example, standard business customers might receive 5% off, while larger accounts receive 10% or 15%.

The tiers can be based on factors such as customer type, annual spend, or membership level. This model is useful when you want to reward larger or more valuable accounts without negotiating a separate price for every customer.

Best for: B2B businesses with different customer segments or wholesale buyers.

3. Negotiated Pricing

Negotiated pricing gives individual customers a price based on an agreement between the buyer and seller. A large retailer, for example, might negotiate a lower unit price in exchange for committing to a specific annual order volume.

This approach gives sales teams flexibility to create account-specific deals. However, managing negotiated prices can become difficult when you have many customers, especially if pricing needs to be maintained across an online store and sales channels.

Best for: Businesses with high-value accounts, long-term contracts, or sales-led B2B relationships.

4. Value-Based Pricing

Value-based pricing sets the price according to the value or measurable outcome a product provides to the customer rather than simply adding a margin to its cost.

For example, a business solution that saves a customer hundreds of hours each year may justify a higher price than a competing product with similar production costs. The challenge is that value can be difficult to measure and may differ between customers.

Best for: Specialized products or services where the business impact can be clearly demonstrated.

5. Competitive Pricing

Competitive pricing uses prices from similar suppliers or competitors as a reference point. A business might price slightly below competitors to attract price-sensitive buyers, match the market average, or charge more when it offers additional value.

This model can help businesses stay aligned with market expectations, but relying too heavily on competitor prices can lead to pricing decisions that do not reflect your own costs or margins.

Best for: Markets where buyers can easily compare suppliers and prices.

6. Volume-Based Pricing

Volume-based pricing reduces the unit price as the customer orders more. For example, a buyer might pay $10 per unit for 10 units, $9 per unit for 50 units, and $8 per unit for 100 units.

This model encourages larger orders while giving buyers a clear financial incentive to increase their purchase quantity. It is particularly common in wholesale and manufacturing, where larger orders can also reduce fulfillment or handling costs per unit.

Best for: Wholesalers, manufacturers, and businesses where larger orders are more efficient to fulfill.

7. Contract or Subscription Pricing

Contract or subscription pricing establishes a fixed recurring price for an ongoing business relationship. Instead of pricing every transaction separately, the buyer agrees to pay a set amount for a defined period, service, product supply, or usage level.

For example, a business could agree to a monthly supply contract at a fixed rate or pay a recurring fee for access to a B2B service. Long-term agreements can give buyers predictable costs while providing the seller with more predictable revenue.

Best for: Recurring services, ongoing supply relationships, and businesses with predictable purchasing patterns.

Which B2B Pricing Model Should You Choose?

There is no single pricing model that works for every B2B business. Many companies combine several approaches. For example, a wholesaler might use cost-plus pricing to establish its base margin, volume-based pricing to encourage larger orders, and tiered pricing to give preferred customers additional discounts.

Your choice should depend on factors such as your cost structure, customer segments, average order size, sales process, and how much pricing flexibility your business needs.

Who Needs to Understand These Seven Models?

• Businesses defaulting to one pricing model without considering alternatives
• Sellers wanting to match their pricing strategy to their specific product and buyer type
• Distributors and manufacturers evaluating which model fits their wholesale relationships
• Companies wanting a broader survey before committing to a specific approach
• Teams wanting language and a framework for discussing pricing strategy internally
• Anyone new to B2B pricing wanting a clear map of the available approaches

Why Understanding All Seven Models Matters for Your Business

• The wrong model for your situation can leave value uncaptured or make you uncompetitive
• A broader view helps you recognize when a hybrid of two models fits better than either alone
• This framework supports clearer internal conversations about pricing strategy
• Matching model to product type and buyer relationship improves both margin and buyer satisfaction
• Recognizing your current model's limitations is the first step toward improving it
• This knowledge protects against defaulting to a model just because it is familiar

For a full breakdown of what Shopify includes natively and where it stops, see our comparison of native B2B versus third-party apps.

How to Apply a B2B Pricing Strategy Model on Shopify

Step 1: Prepare Your Store and Customer Tags

Identify which of the seven models, or combination, best fits your product type and buyer relationships before configuring anything.

• Review your product type and typical buyer relationship to identify a fitting model
• Decide if a hybrid approach, such as tiered plus volume-based, fits better than one model alone
• Create customer tags reflecting your chosen model's structure

Step 2: Install and Configure Wholesale Pricing Discount B2B

Install Wholesale Pricing Discount B2B to implement tiered, negotiated, or volume-based pricing, the three models it directly supports through tags, breaks, and overrides.

• Connect the app and configure tiered pricing through customer tags if that model fits
• Add volume discounts and quantity breaks if a volume-based component fits your strategy
• Add per-customer overrides for accounts warranting negotiated pricing

Step 3: Create the Pricing or Discount Rules

Build the specific rules matching your chosen model or hybrid, confirming the structure reflects the strategic reasoning behind your choice.

• Set percentage discounts per customer group for a tiered component
• Set volume discounts and quantity breaks for a volume-based component
• Set individual overrides for accounts requiring negotiated pricing

Step 4: Test With a Tagged Test Customer

Test the resulting structure with tagged test accounts, confirming it reflects the specific model or hybrid you intended.

• Create test accounts reflecting your chosen model structure
• Confirm pricing displays correctly according to the intended strategy
• Ask Sidekick which customers are in a specific tier group to confirm the model is configured accurately

Step 5: Go Live

Once the structure tests correctly, publish it live and document the strategic reasoning behind the chosen model for future reference.

• Publish the pricing structure reflecting your chosen model to your live storefront
• Document the strategic reasoning behind the model choice
• Revisit the model periodically as your product line or buyer base evolves

B2B Pricing Strategy Model Examples

Specialty Coffee Roaster (Food and beverage)
Problem: Used a single flat wholesale discount for every account, missing the chance to combine tiered and volume-based elements for a more strategic structure.
Setup: Combined tiered customer groups with volume discounts through Wholesale Pricing Discount B2B, reflecting both relationship and order size in the final price.
Result: The hybrid model captured more value than either a purely tiered or purely volume-based approach alone would have.

Industrial Equipment Supplier (Industrial goods)
Problem: Negotiated every single account individually, a model that worked for large strategic distributors but did not scale to smaller, more frequent dealer accounts.
Setup: Introduced a tiered structure for standard dealer accounts, reserving negotiated pricing only for genuinely strategic distributor relationships.
Result: Standard accounts onboarded faster under the scalable tiered model, while strategic accounts retained their individually negotiated terms.

Read more case studies for our apps.

Best Practices

• Match your pricing model to your specific product type and buyer relationship
• Consider a hybrid approach if one model alone does not capture your full situation
• Reserve negotiated pricing for genuinely strategic accounts, not every buyer
• Use tiered pricing for scalability across standard accounts
• Layer volume-based discounts where order size should also affect price
• Revisit your model choice periodically as your business evolves

Summary

B2B pricing strategy spans at least seven distinct models, cost-plus, tiered, negotiated, value-based, competitive, volume-based, and contract or subscription, each fitting a different combination of product type and buyer relationship. Many businesses ultimately combine two or three of these models rather than forcing their entire pricing structure into one approach. For more on how tag-based tools implement several of these models, see our comparison of native B2B versus third-party apps.

To implement tiered, volume-based, or negotiated pricing as part of your B2B strategy, try Wholesale Pricing Discount B2B.