ECOMMERCE TIPS

How to Create Tiered Discounts in Shopify: Complete Guide

by Hannah 

  • Dec 3rd, 2024

  • 15 mins read

Shopify tiered discounts

A study by Price Intelligently revealed that businesses leveraging tiered pricing strategies experienced a jaw-dropping 98% revenue increase compared to those sticking to a one-size-fits-all approach.


While the potential is immense, crafting and implementing effective Shopify tiered pricing can be a complex endeavor. With countless variables to consider, it's easy to get lost in the complexity. That's where this comprehensive guide comes in.


In this complete guide to Shopify tiered discounts, you'll learn how to set up discount tiers in your store, create effective tiered pricing strategies, and see real examples from successful merchants. By the end, you'll be equipped with the knowledge and tools to create and implement successful tiered pricing strategies that drive revenue and customer satisfaction.


Let’s discover Shopify tiered discounts with us!

1. Understanding Shopify tiered discounts: Complete overview

1.1. What are tiered discounts in Shopify? (definition, types & examples)

Tiered discount Shopify involves setting different price points for specific quantity ranges of a product. As customers purchase more, the price per unit decreases, making it more attractive to buy in bulk. This strategy is particularly effective for businesses selling products in large quantities, such as wholesale or bulk retailers.

1.2. 5 key benefits of Shopify tiered discounts

When it comes to e-commerce, creating a strategy that boosts sales and keeps customers coming back is the ultimate goal. One effective way to achieve this is by implementing Shopify tiered discounts on your store. Here's a closer look at the key benefits and why this strategy can transform your business.

  • Boost average order value

Tiered discounts work by encouraging customers to spend more to unlock greater savings. For example, offering “10% off orders over $50 and 20% off orders over $100” motivates shoppers to add more items to their cart, directly increasing your average order value.

  • Improve customer loyalty

Everyone loves a good deal. By providing Shopify tiered discounts, you create a rewarding shopping experience that leaves customers feeling valued. This positive interaction makes them more likely to return, fostering long-term loyalty.

  • Clear inventory faster

Got products that need to move? Shopify discount tiers are a great way to clear out slow-moving or seasonal inventory. By incentivizing bulk purchases, you can make room for new stock while still driving sales.

  • Increases customer engagement

Shoppers often browse more products to reach the next discount tier. This exploration not only increases engagement but can also introduce customers to items they may not have initially considered, boosting overall sales.

  • Enhance marketing campaigns

Shopify tiered discounts pair perfectly with promotional events like Black Friday, holiday sales, or back-to-school campaigns. They help create a sense of urgency and excitement, attracting new customers and encouraging repeat buyers to take advantage of the savings.

1.3. Types of Shopify tiered discount

When setting up discount tiers in Shopify, you can choose from several formats to match your business needs. Here are proven examples of Shopify tiered discount structures:

- Order value tiers or spend-based discounts: Spend $50 get 10% off, spend $100 get 15% off

- Category-based discounts: Buy 2 shirts get 10% off, buy 3 get 15% off

- Customer-based discounts: VIP customers get additional 5% at each tier

  • Spend-based discounts

Customers unlock discounts based on their total order value. For example, get $15 off when spending $60, $20 off when spending $80, and $25 off when spending $100.

Shopify tiered discounts

An example of implementing tiered discounts in eCommerce

  • Category-based discounts

Discounts are applied when customers purchase from a specific product category. A tiered discounts example is that, spend $100 on electronics and save $15, spend $200 and save $40, and so on.

  • Customer-based discounts

Exclusive discounts are offered to specific customer groups, such as members or loyal customers. For example, VIP customers receive 15% off, loyalty program members get 10% off, and wholesale buyers get 20% off.

1.4. Shopify tiered discounts vs. other types of discounts: Key differences

When it comes to discounts, businesses have several strategies to choose from, including tiered discounts, volume pricing Shopify discounts, percentage discounts, and more. Each serves a unique purpose, but Shopify tiered discount stands out for its ability to incentivize spending behavior progressively. Let’s explore how tiered discounts differ from other common discount types.

1.4.1. Tiered discounts vs. volume discounts

Tiered discounts are about encouraging larger carts by increasing total spending, whereas volume discounts reward customers for purchasing a greater quantity of a specific product. 


Volume discounts are ideal for businesses looking to move more of a particular item, while Shopify tiered discounts are great for boosting the overall value of customer orders.


Example:

  • Tiered discounts: Spend $100, get $10 off; spend $200, get $30 off.
  • Volume discounts: Buy 5 items, get 10% off; buy 10 items, get 20% off.

Shopify tiered discounts

Tiered discounts make shoppers feel that they receiving more benefits

1.4.2. Tiered discounts vs. percentage discounts

Tiered discounts offer incremental rewards based on specific milestones, which can encourage customers to spend more to unlock higher discounts. In contrast, percentage discounts are simple and offer the same savings across all purchases, regardless of the cart’s size or contents. 


Shopify tiered discounts are more dynamic and can better incentivize customers to increase their cart size, while percentage discounts provide immediate, straightforward savings.


Example:

  • Tiered discounts: Spend $100, get 10% off; spend $200, get 20% off.
  • Percentage discounts: Get 15% off your entire order.

1.4.3. Tiered discounts vs. Buy-One-Get-One (BOGO) discounts

Shopify tiered discounts encourage customers to increase their total order value, making it suitable for boosting overall sales. On the other hand, BOGO discounts focus on encouraging customers to buy more of a specific item or a related item in order to receive a free product. 


BOGO discounts are often used to move specific inventory or promote complementary items, while tiered discounts are more effective for driving higher total sales.


Example:

  • Tiered discounts: Spend $50, save $10; spend $100, save $25.
  • BOGO discounts: Buy 1, get 1 free; buy 2, get 1 free.

tiered discounts in Shopify

To sum up, Shopify tiered discount is a fantastic way to boost sales by encouraging customers to spend more with the promise of bigger savings as their order total rises. Whether based on order value, quantity, or specific products, tiered discounts reward shoppers for reaching new spending milestones, driving higher average order value (AOV). 


Now, let’s dive into how to easily create tiered discounts using Shopify’s native features and start turning those big savings into bigger sales!

2. How to setup tiered discounts in Shopify (native method)

2.1. Step-by-step guide: Creating your first Shopify tiered discount

Follow this step-by-step guide to create your tiered discount setup in Shopify:

  • Access your Shopify Admin: Go to your admin panel.
  • Navigate to Discounts: Click on Discounts in the left sidebar.
  • Create Discount: Click on Create discount.
  • Select Discount Type: Choose Amount off products from the discount type menu.

create tiered discounts in Shopify

  • Choose discount method: You can choose Shopify tiered automatic discounts or Discount codes.
  • Configure discount value: Specify the discount value for each tier. You can set different values for different spending thresholds.

create Shopify tiered discounts

  • Choose applied items: If you want to apply the discount to specific products or collections, select specific products or Specific collections in the applies to section and add your selections.

create Shopify tiered discounts

  • Set conditions: In the discount configuration, specify the minimum purchase amount required to qualify for the discount.

create Shopify tiered discounts

  • Set customer eligibility: Select specific customer segments and choose the segments you want to apply the discount to.

create Shopify tiered discounts

  • Check other settings: Set any usage limits if needed, and configure the Active dates for the discount.

create Shopify tiered discounts

  • Save the discount: Once you have configured all the settings, click Save to apply the discount.

By following this guide, you are successful in creating each tier, then you need to repeat these steps to create the next ones. For example, the first one is 10% for $100, the second one is 15% for $200, and the third one is 20% for $300.

  • Pro tip:

    When setting up Shopify functions tiered discount, don’t overcomplicate things. Stick to a few clear tiers (3 to 4) to prevent customer confusion.

 2.2 Limitations & requirements from Shopify 

While Shopify makes it easy to set up tiered discounts, there are a few important limitations to keep in mind:

You can combine different types of discounts, such as order discounts with free shipping discounts or product discounts with free shipping discounts. 

However, to combine product discounts with order discounts or order discounts with other order discounts, your store must not use any customizations or features related to checkout.liquid.
create Shopify tiered discounts

Notice: While Shopify tiered discount campaigns are a great tool for increasing sales, be careful not to make the discounts too large. Offering deep discounts can eat into your margins, especially if your products are already at a low price point.
  • Active discounts limit

You can have a maximum of 25 active automatic discounts at any given time, which includes app-based discounts. Customers can use a maximum of 5 product or order discount codes and 1 shipping discount code on the same order.
  • Eligibility requirements

Ensure that your store meets the eligibility Shopify discount rules and requirements for combining discounts. If you are using the Licensify app, you will not be able to create certain discount combinations.
  • Discount application

Discounts apply to the subtotal of the order before taxes. If you have multiple discounts, they will be applied in a specific order, with product discounts applied first, followed by order discounts.
  • Limited tier levels

Shopify's native feature doesn't directly support complex, multi-tiered discounts. You can create multiple discount codes with different minimum order values, but this can become cumbersome for intricate tiered structures.
  • Basic customization limit

You can set usage limits for discount codes, but more advanced usage rules, such as customized customer segments, may require additional workarounds.

To address these limitations, many Shopify merchants turn to third-party apps. These apps offer more advanced features and flexibility, allowing you to create sophisticated Shopify tiered discount promotions.

Let’s check them out with us!

3. Create advanced tiered discounts with Shopify apps

If you require advanced customization, such as offering discounts on specific products, creating multi-tiered rules based on different conditions, or having a more flexible discounting structure, a tiered discount app Shopify can offer the solutions you need.

3.1. Pros and cons

When using a Shopify tiered discount app, you will experience:
  • Advanced features: Third-party apps often provide a wider range of features, including complex tiered pricing, dynamic pricing, and personalized discounts.
  • Flexibility: You can create custom discount rules based on various factors such as product quantity, customer group, and order value.
  • Ease of use: Many apps have user-friendly interfaces that make it easy to set up and manage Shopify tiered discounts.
  • Time-saving: Automating discount rules can save you time and reduce errors.
  • Integration with other apps: Some apps integrate with other Shopify apps, such as loyalty programs and marketing automation tools, to create powerful marketing campaigns.

Shopify tiered discounts

Shopify apps that help merchants create tiered discounts

However, please keep in mind that these third-party apps come with:
  • Cost: Many apps require a monthly subscription fee.
  • Performance impact: Some apps may slow down your store's loading speed.
  • Dependency: You may become reliant on the app's continued development and support.

3.2. Top 5 apps for Shopify tiered discounts

Here are some of the top-rated Shopify apps for creating advanced tiered discounts:

Apps

Review

Pricing

Key features

4.9/5 (1,000+ reviews)

Free - $24.99/month

  • Tiered order discounts, volume discounts
  • BOGO offers
  • Product bundles
  • Shipping goal discounts
  • Real-time analytics
  • Multi-language & multi-currency support
  • Flexible placement of offers

4.9/5 (400+ reviews)

Free - $39.90/month

  • Bulk, quantity, cart & tier discounts
  • Countdown timer for discounts
  • Customizable discount widget & sales badge
  • Auto-update discounted products
  • All-in-one price editor & discount manager

5.0/5 (1,100+ reviews)

Free

  • Volume discount, bulk discount & tiered pricing
  • Bundles, cross-sell & upsells
  • Buy One Get One FREE (BOGO) offers
  • Quantity breaks Shopify & wide bundles
  • Display discounted prices & mix and match

4.9/5 (1,900+ reviews)

Free - $9.99/month

  • Bundles, discounts & quantity breaks
  • Classic bundles, mix & match bundles, tiered discounts
  • Bundle discount types: percentage, fixed amount, fixed price
  • Bundle landing pages & shortcodes 
  • Subscription compatibility

Check a full review of the best Shopify discount apps here with us!

3.3. Implementation steps

Step 1: Choose the right app

Start by selecting a Shopify tiered discount app that suits your business needs. Consider factors like the level of customization you need, your budget, and the app's compatibility with your theme and other apps.

Step 2: Install the app

Install the app from the Shopify App Store and follow the on-screen instructions for setup.

Step 3: Choose the product

Select the specific product or product category that will trigger the Shopify tiered discount. For example, you might choose a set of products or a specific collection to apply the discount rules.

Step 4: Define your discount rules 

Set up the tiers for your discounts. For example, you might create a rule such as “10% off for orders over $100” and “20% off for orders over $200.” Be sure to adjust the discount percentages, conditions, and product eligibility.
set up the tiered discounts

Step 5: Set up display settings

Configure how the discount will be displayed to customers. Some apps allow you to customize pop-ups, banners, or badges to show the discount offer on product pages, cart pages, or at checkout.

Step 6: Test your discounts

Before going live, test your Shopify tiered discounts by making test purchases to ensure the discount applies correctly.

Step 7: Publish and monitor

Once you’re satisfied with the setup, publish your discounts and monitor the results through the app’s analytics dashboard.

Notice: This is a general guideline; please follow the specific instructions provided by each app for detailed setup and customization.

3.4. Advanced customizations & settings suggestions

When using Shopify apps to create tiered discounts, it's important to take advantage of advanced customizations and settings to fully optimize the discount strategy for your store. These settings allow you to fine-tune how your discounts are applied, displayed, and tracked to meet your specific business goals. Here are some advanced customizations and settings suggestions to enhance your Shopify tiered discount experience.
promote the tiered discounts in Shopify

Actively promote your tiered discounts for a better result

  • Dynamic discounts: Use apps that offer dynamic pricing to adjust discounts based on factors like customer behavior, cart contents, or time-based promotions (e.g., limited-time offers).
  • Countdown timers: Add a countdown timer to your tiered discount offers to create a sense of urgency. This works particularly well for flash sales or seasonal promotions.
  • Upselling and cross-selling: Combine tiered discounts with upselling and cross-selling strategies (e.g.: Offer a higher discount if customers purchase related items or buy in bulk).
  • Customer-specific discounts: Tailor Shopify tiered discounts for different customer groups, such as VIPs, wholesale buyers, or frequent shoppers, to encourage loyalty and boost sales.
  • Multi-currency & multi-language support: If your business serves customers from various regions, choose an app that supports multi-currency and multi-language for a seamless shopping experience.

Both Shopify’s native features and third-party apps offer unique advantages for creating tiered discounts, and the choice depends on your store’s needs.

Shopify apps offer advanced features like dynamic pricing, bundling, and personalized discounts, giving you more flexibility and control over your discount strategy. However, they may come with additional costs and require more setup time.

The best solution depends on your business goals, the complexity of your discount strategy, and your budget.

4. 7 best practices for Shopify tiered discount strategies

Implementing tiered discounts on Shopify can significantly boost your sales and average order value (AOV), but to make the most of this powerful pricing strategy, it's essential to follow some proven strategies and best practices. In this section, we'll cover the best strategies, advanced tips, and techniques to maximize the effectiveness of your Shopify tiered discount offers.

4.1. Leverage social proof to enhance discounts

Social proof can be a powerful tool to make your Shopify tiered discounts even more enticing. Use customer reviews, testimonials, or influencer endorsements to highlight the value of your tiered offers.

You can display social proof in key places such as the cart, product pages, or at checkout to reinforce the value customers are getting from their purchases.

In addition, it is a great idea to add "Popular Among Shoppers" sections or "Trending Products" labels next to discounted products. This not only uses social proof but also nudges customers to take advantage of the offer.

4.2. Mobile-friendly tiered discount display

Many customers shop on mobile devices, so your Shopify tiered discount offers must be optimized for mobile. Ensure that the discount and offer information is easy to see and apply on smaller screens.
mobile-friendly tiered discount display

Optimize your tiered discounts display for mobile devices

You should consider using a sticky bar or a floating button that displays the discount progress (e.g., “Spend $20 more to unlock 10% off”) as users scroll through your site on mobile.

4.3. Use psychological pricing

Pricing psychology can significantly influence how customers perceive your tiered discounts. For example, you can use:
  • Round numbers: Use round prices (e.g., $99 instead of $100) to make discounts appear more generous.
  • Odd pricing: Use odd numbers like $49.99 to make the discount feel more substantial and more appealing to customers.

4.4. Take advantage of dynamic pricing

Dynamic pricing is a powerful tool that allows you to adjust your prices in real-time based on various factors like inventory levels, demand, and competitor prices.

For instance, you can adjust your Shopify tiered discount thresholds based on market conditions, such as offering higher discounts when demand is low or reducing discounts during peak sales periods.

4.5. A/B test your discount strategies

Testing different tiered discount structures can provide valuable insights into what works best for your customers. Use A/B testing to compare various discount levels, offers, and layouts to find the most effective strategy.
Tiered discounts with countdown timer

Tiered discounts with the countdown timer

Don’t forget to continuously track the performance of your Shopify tiered discount campaigns using analytics to adjust and improve based on customer behavior.

4.6. Monitor customer behavior & adjust accordingly

Analyzing customer behavior allows you to refine your Shopify tiered discount strategy. You can use Shopify's built-in analytics or third-party tools to track which discount tiers are most successful and where customers drop off. It is recommended to:
  • Look for trends in purchase patterns to determine the most popular discount tiers and adjust your offers accordingly.
  • Track customer redemption rates to see how often discount tiers are used and if certain thresholds need adjusting.

Based on your findings, adjust the timing of your promotions to match customer buying habits (e.g., offering higher discounts during peak shopping periods or after cart abandonment).

4.7. Balance profit and customer satisfaction

Maintaining healthy profit margins while offering attractive discounts requires careful calculation and strategy. Here's how to strike the right balance:

Calculate your minimum viable margin:
Before setting up tiered discounts, calculate your minimum acceptable margin:
- Product cost + Operating expenses + Shipping costs
- Set a firm "floor price" for each tier
- Example: If your product costs $20 and minimum margin is 30%, your lowest discounted price shouldn't fall below $26

Optimize tier thresholds:
Structure your tiers to maintain profitability:
- Entry tier: 5-10% discount with 25-30% margin
- Mid tier: 15-20% discount with 20-25% margin
- Top tier: 25-30% discount with 15-20% margin

Strategic implementation tips:
1. Premium Products: Limit maximum discount to 20% to maintain brand value
2. Seasonal Adjustments: 
   - Peak season: Tighter margins but higher volume
   - Off-peak: Higher margins with more aggressive tiers to drive sales
3. Customer Lifetime Value (CLV) Consideration:
   - New customers: Conservative discounts to test engagement
   - Loyal customers: More generous tiers based on purchase history

Monitor key metrics:
- Track average order value (AOV) against margin percentages
- Measure customer retention rates at each tier
- Analyze repeat purchase behavior post-discount

  • Pro tip:

    Create a buffer in your regular pricing structure to accommodate planned discounts while maintaining profitability. For example, if your target margin is 40%, price products at 50% margin to allow for tiered discounts without compromising business sustainability.

By following these guidelines, you'll create a tiered discount strategy that drives sales while protecting your bottom line.

Shopify tiered discounts

5. Troubleshooting common Shopify tiered discount issues

When setting up tiered discounts on Shopify, you may encounter some common technical issues. Here’s how to troubleshoot them:

5.1. Fixing tiered discount display problems

Issue: Customers are not seeing the expected Shopify tiered discount at checkout.

Solution:

  • Double-check that your discount conditions are properly set, such as the minimum spend or quantity requirements.
  • Ensure there are no conflicting discount codes that could override the Shopify tiered discount.
  • Verify that the discount is active and hasn't expired.

5.2. Discounts not displaying on product pages

Issue: Tiered discounts aren't visible to customers on the product or cart pages.

Solution:

  • Make sure that the discount is set to appear on the relevant product pages or in the cart.
  • Ensure your theme is compatible with Shopify's discount display settings or that the discount widget is properly enabled.

5.3. Errors when combining discounts

Issue: Customers are unable to use multiple discounts or combinations of discounts.

Solution:

  • Shopify limits the number of active discounts or combinations (e.g., 5 product/order discount codes). Ensure you're not exceeding this limit.
  • For apps, make sure the app settings allow multiple discount combinations (some apps restrict this functionality).

5.4. Discounts not showing on mobile devices

Issue: Shopify tiered discounts appear on desktop but not on mobile.

Solution:

  • Check that your Shopify theme is responsive and that the discount code widget is enabled for mobile users.
  • Some apps require additional mobile-specific settings. Make sure the discount is mobile-optimized.

5.5. Discounts not showing in multi-currency stores

Issue: Discounts are not showing for customers in different currencies.

Solution:

  • Ensure that your store’s multi-currency settings are properly configured in Shopify Payments.
  • Some apps may require additional configuration to support multi-currency displays.

6. FAQs about Shopify tiered discounts

1. What is discount tier level?

A discount tier level refers to the different stages or levels within a tiered discount system, where the amount of discount a customer receives increases based on certain conditions. These conditions could be the total amount spent, the quantity of products purchased, or the specific products in the order. Each tier represents a step that rewards customers for spending more or buying in larger quantities.


For example:

  • Tier 1: Spend $50, get 10% off.
  • Tier 2: Spend $100, get 15% off.
  • Tier 3: Spend $150, get 20% off.

2. How to add automatic discount in Shopify?

To add an automatic discount in Shopify, follow these steps:

  • From your Shopify admin, go to Discounts.
  • Click Create discount.
  • From the Select discount type menu, choose the type of discount you want to create (e.g., Amount off products or Amount off orders).
  • Under Method, select Automatic discount.
  • In the Title section, enter a name for the automatic discount (e.g., 15offnecklaces).
  • In the Discount value section, enter the monetary or percentage value for the discount.
  • Optionally, set a minimum requirement for the discount, such as a minimum purchase amount or quantity of items.
  • Use the Active dates section to set the start and end dates for the discount.
  • Click Save discount to apply your changes.

Check a comprehensive guide to Shopify automatic discounts here!

3. How to calculate tiered pricing?

To calculate Shopify tiered pricing, you can:

  • Determine tiers: Decide on the number of tiers and what features or quantities will be associated with each tier.
  • Set prices: Set a price for each tier, making sure there's a clear difference in value between each tier.
  • Calculate costs: Calculate the cost of each unit.

4. Is tiered pricing better?

Tiered pricing is effective if your goal is to drive higher sales per transaction, but it works best when you have a clear structure and customers who are likely to buy in larger quantities. It’s ideal for stores offering a wide range of products with varying price points or when you want to increase customer spending. However, businesses should evaluate their margins and customer behavior to ensure tiered pricing is the right choice.

7. Summary: Unlocking the power of Shopify tiered discount

Tiered discounts aren’t just a pricing strategy - they’re a way to create excitement and incentivize bigger purchases. By encouraging customers to spend more or buy in larger quantities, you can drive up your average order value (AOV) and boost overall sales. 
Whether you stick with Shopify's native features or explore third-party apps for advanced customizations, the key is finding the right balance that works for your business and delights your customers.

However, your Shopify tiered discount strategy shouldn’t stay static. Keep testing and refining:

  • Experiment with thresholds: Try different spending levels or quantities to see what drives the most impact.
  • Use customer insights: Personalize discounts based on purchase behavior or loyalty tiers.
  • Combine strategies: Pair tiered pricing with bundling, free shipping, or limited-time offers for maximum effect.

As shopping habits change, staying agile with your discount strategy will keep your store competitive and engaging. 


If you’re ready to take your Shopify tiered discounts to the next level, consider apps that offer advanced customization and insights. Boost your sales and deliver an exceptional shopping experience - try Qikify app today and watch your revenue grow!
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  • ABOUT THE AUTHOR

  • Hannah Qikify author

    Hannah

    eCommerce Specialist

    With over 5 years of experience under her belt, Hannah is an eCommerce writer who crafts content specifically for a website that deals with online sales. She simplifies technical details to assist entrepreneurs in utilizing the platform and launching their online ventures.