Breakpoint pricing – bulk buyers pay less
Tuesday, March 31st, 2009Commercial layers on Koordinates can now be sold with breakpoint (or tiered) pricing.
Buyers of such layers pay less per area (or feature) the more they buy.
How does it work?
The seller of a layer adds ‘breakpoints’ at which cheaper prices apply. Breakpoints are cumulative, so the total sale charge is the total of (Breakpoint 1 to Breakpoint 2) plus (Breakpoint 2 to Breakpoint 3) plus (Breakpoint 3 to Breakpoint 4), depending on which breakpoints apply.
Example
Imagine a commercial layer covering 80,000 Ha.
The seller of the layer decides on these breakpoints:
| Breakpoint – Area (Ha) | Price | Explanation |
|---|---|---|
| 1,000 | 0.1c per Ha | Buyer gets charged 0.1c per Ha for areas up to 1,000Ha. |
| 10,000 | 0.08c per Ha | Buyer gets charged 0.1c for the first 1,000Ha, then 0.08c per Ha from 1,000Ha to 10,000Ha. |
| 50,000 | 0.05c per Ha | Buyer gets charged 0.1c for the first 1,000Ha, 0.08c per Ha from 1,000Ha to 10,000Ha, then 0.05c per Ha from 10,000 to 50,000. |
| Above 50,000 | 0.04c per Ha | Buyer gets charged 0.1c for the first 1,000Ha, 0.08c per Ha from 1,000Ha to 10,000Ha, then 0.05c per Ha from 10,000 to 50,000, then 0.04c per Ha from 50,000Ha to 80,000Ha. |
Which looks like this when the seller creates the breakpoints in Koordinates:

These breakpoints then equal the following sale quotes for some example purchase areas:
| Purchase area | Quote | Effective cost |
|---|---|---|
| 500 Ha | $0.50 (but minimum $1 sale applies) | .1c per Ha |
| 3,000 Ha | $2.60 | 0.87c per Ha |
| 25,000 Ha | $15.70 | 0.63c per Ha |
| 75,000 Ha | $38.20 | .051c per Ha |

