What is 'Per usage' formula?

Introduction

This article explains the "Per usage" formula, which enables Vendors to create Usage-Based Subscriptions without displaying a cost estimator to Customers. This formula is useful when pricing complexity or external factors make it impractical to provide upfront cost estimates in the Platform.

In this article:

• Understanding the Per usage formula
• When to use the Per usage formula
• How to configure the Per usage formula

Understanding the Per usage formula

The Per usage formula allows Vendors to set up Usage-Based Subscription pricing plans without configuring detailed meters or pricing tables in Product Management. Unlike standard usage-based pricing that includes the Usage-Based calculator for Customers to estimate costs, this formula intentionally omits the cost estimator.

For information on standard usage-based pricing with cost estimation, refer to "How to Set up and Operate Usage-Based Offer" and "What is Usage-Based calculator?".

When to use the Per usage formula

The Per usage formula is appropriate for several scenarios where presenting an upfront cost estimator is not feasible or desirable:

Large or complex meter sets: When there is a very large set of data or meters and the complete list cannot be programmatically presented in advance.

External pricing tools: When the Vendor provides their own Price calculator through an external link or separate system.

API-based billing: When Vendor APIs can fully handle correct Invoice parsing and pricing calculations independently.

Direct API integration: When usage reports are integrated directly using Vendor APIs rather than through the Platform.

How to configure the Per usage formula

To set up a pricing plan using the Per usage formula:

1. Navigate to the Price section in Product Management.
2. Configure the Billing Cycle settings as needed.
3. In the Pricing rules section, select "Per usage" from the Formula dropdown.
4. Save your pricing plan configuration.

Results of this configuration

In Product Management:

• Cost Price and Suggested Retail Price values display as 0
• These Price fields cannot be edited
• No meter configuration or pricing tables are required

On the Platform for Customers:

• The Billing Cycle displays as configured in the Offer
• The cost shows as 0
• No Usage-Based calculator is presented
• Customers cannot estimate costs before purchase

Summary

The Per usage formula enables Vendors to create Usage-Based Subscriptions without providing upfront cost estimates through the Platform. This approach is ideal when pricing complexity, external calculators, or API-based billing make it impractical to configure detailed meters and pricing tables in Product Management. While Customers see a cost of 0 on the Platform, actual Usage Fees are calculated and billed according to the Vendor's systems.