> ## Documentation Index
> Fetch the complete documentation index at: https://docs.sequencehq.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Usage-based pricing

> Sequence supports a range of standard and usage-based pricing models

![Usage-based pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_1.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=81776a9ebac2fbb43450011d4c8d1743)

Choose your pricing model

## Linear pricing

Charge a single, linear rate for usage.

> [card] Example
>
> * `$0.1` per unit
> * `550 units = $55.00`

![Linear pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_2.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=0afa4a287eed9b284daa8c07ba796151)

Examples: [OpenAI - GPT-3 Davinci](https://openai.com/pricing/)

***

## Linear pricing (Percentage-based)

Charge a single, linear percentage-based fee for usage. You can optionally set a minimum and a maximum fee threshold. For example, charge 0.5% of every payment event with a \$1 minimum and a \$10 cap per payment.

> [card] Example
>
> * `0.5%` per payment
>
> Calculation for 50 payments amounting to `$1,000` = `$1,000` \* `0.5%` = `$5.00`

![Linear percentage pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_3.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=c68549caca5c06da86afe75cf91049ef)

Examples: [Stripe - Invoicing](https://stripe.com/gb/invoicing/pricing)

## Linear pricing with fee thresholds

Use minimum and maximum fee threshold to charge a predictable amount for transactions.

> [card] Example
>
> * `2.00%` per payment, `$1.00` minimum unit fee, `$10.00` maximum unit fee
>
> Calculation for 3 payments of `$25`, `$100` and `$500`:
>
> * `2.00%` of `$25.00` = `$0.50` -> `$1.00` minimum fee applies
>
> * `2.00%` of `$100.00` = `$2.00` -> Within min and max fee threshold
>
> `2.00%` of `$750.00` = `$15.00` -> `$10.00` cap applies
>
> Total: `$1.00` + `$2.00` + `$10.00` = `$13.00`

![Linear percentage pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_3.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=c68549caca5c06da86afe75cf91049ef)

Examples: [Stripe - Invoicing](https://stripe.com/gb/invoicing/pricing)

***

***

## Volume pricing

Offer volume discounts for higher usage and an optional flat fee per usage tier. Customers only pay the unit and flat fee in their current tier.

> [card] Example
>
> * Tier 1: 0 - 100 units @ `1$/unit` + `$20` flat fee
> * Tier 2: 100 - ∞ units @ `$0.75/unit` + `$50` flat fee
>
> Calculation for 125 units: `125 * $0.75 + $50 = $143.75`

![Volume pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_4.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=43d00247ae373afef3609e9adb1bfa2d)

Examples: [Twilio - SMS](https://www.twilio.com/sms/pricing/)

***

## Volume pricing (Percentage-based)

Similar to standard volume tiers, but the unit price is a percentage of a sum (e.g., total transactions). Customers only pay the percentage and flat fee in their current tier. Optionally configure a unit cap that applies to each percentage charge (e.g. 0.2% of transaction volume, capped at \$5 per transaction).  For percentage-based volume pricing, you can optionally set a minimum and a maximum fee threshold. For example, charge 0.5% of every payment event with a \$1 minimum and a \$10 cap per payment.

> [card] Example
>
> * Tier 1: `0 - $10,000` @ 0.1% + `$500` flat fee
> * Tier 2: `$10,000 - ∞` @ 0.05% + `$250` flat fee
>
> Calculation for `$15,000` Transaction volume: `$15,000 * 0.05% + $250 = $325`

![Volume percentage pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_5.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=a6c8ce861d4f0e5a4444e0d05dcf8b58)

Examples: [Stripe - Payments](https://stripe.com/pricing)

***

## Graduated pricing

Charge multiple rates for multiple tiers (similar to progressive income tax), with an optional flat fee per tier. Tiers and flat fees accumulate.

> [card] Example
>
> * Tier 1: 0 - 500 units @ `$0.5/unit` + `$500` flat fee
> * Tier 2: 501 - ∞ units @ `$0.7/unit` + `$750` flat fee
>
> Calculation for 600 units: `500 * $0.5 + $500 + 100 * $0.7 + $750 = $1,570`

![Graduated pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_6.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=5e8b83c25d41679003232fc05a0048f9)

Examples: [Amazon Web Services - S3](https://aws.amazon.com/s3/pricing/)

***

## Graduated pricing (Percentage-based)

Similar to standard graduated tiers, but the unit price is a percentage of a sum (e.g., total transactions). Tiers and flat fees accumulate.

> [card] Example
>
> * Tier 1: `0 - $10000` @ 0.1% + `$500` flat fee
> * Tier 2: `$10000 - ∞` @ 0.05% + `$250` flat fee
>
> Calculation for `$15000` Transaction volume: `$10000 * 0.1% + $500 + $5000 * 0.05% + $250 = $762.50`

![Graduated percentage pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_7.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=0dd55c5ab50ba62c69c92b1bd8605318)

***

## Packaged pricing

Charge a fixed price for a package of units (similar to linear rate but with packaged quantities). Also known as stair-step pricing.

> [card] Example
>
> Pricing: `$10` per 250 units
>
> Calculation for 600 units: `3 Packages * $10 = $30`

![Packaged pricing](https://mintcdn.com/sequence/kw8O-QAyxJLIUkK_/images/product/plans-and-products/usage_8.png?fit=max\&auto=format\&n=kw8O-QAyxJLIUkK_\&q=85\&s=fa150d23c3ffd01e3f3331e461fe956e)

## Credit burndowns

Offer credit grants that customers can burn down each month. Unused credits are rolled over to subsequent billing periods. If all credits are burned down in a period, overages apply.

> [card] Example
>
> Credits: `$250` for 1500 API credits (no expiry)
> Overages: `$0.10` per credit
>
> Calculation for 1600 units: `100 * $0.10 = $10`

To implement this pricing model, grant credits to customers via API or dashboard. In addition to usage-credits (tied to a usage metric), you can also offer cash credits. Learn more about [credit grants](https://docs.sequencehq.com/credits/overview.md).


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