Pricing in Magento

Magento offers a plethora of options when it comes to pricing and discounts. Not to mention adding in extra functionality with third party extensions. I want to run through those offered in standard Magento and how they work together.

Disclaimer: you may feel like you are back in Accounting 101 by the end of this

The diagram below shows a typical product with various prices and surcharges displayed.

Ground Rules

  • Magento will always display (and use) the lowest applicable price as the product price
  • Tier prices that are higher than the current product price are not displayed

Which Price Will It Use?

When a product is displayed, the “product price” is calculated by first examining which is lowest from:

  • original price
  • special price
  • tier price

The lowest of these is displayed.

Custom Options

If a product has custom options that include a surcharge or price, this is added to the product price (determined above). See the example cart below, where the tier price of $11.50 is used and an XL size hat has a $2 surcharge added to each item.

Catalog Price Rules

It is worth exploring for yourself the options available in catalog price rules as they can be very powerful. However, know this: the price used during calculations is the original price. Below is an example where I have created a catalog price rule that offers a 10% discount for wholesale customers across my catalog. You’ll see this discount has been applied to the $12.99 list price of my hat. The special price or tier price is NOT discounted by 10% as well.

So again…..Which Price Will It Use?

Actually the list looks like:

  • original price
  • special price
  • tier price (based on quantities in the cart)
  • price calculated from catalog price rules

The lowest of these is displayed as the product price.

Blue Jalappeno and Tiered Pricing

We have two extensions in this space:

  • Tiered Pricing Across Multiple Products allows you to offer bulk buy discounts across your catalog. So in the example cart above, you could get the tier price discount if you buy 3 small and 2 x-large hats. In standard Magento this is not possible.
  • Percentage Off Tiered Pricing lets you set tier pricing as a % discount, rather than a set price.

How do they fit in with the Magento pricing?

Both extensions do not alter the core pricing logic in Magento. In both cases, the tier price is assessed alongside special price and catalog price rules, to determine which is the lowest.

We have been asked in the past whether Percentage Off Tiered Pricing would take catalog price rules or special price into account. For example, if you offer a tier discount of 10% off for 10 or more hats, would this 10% be off the special price of $11.99 or the catalog price rule price of $11.69? The answer is No, we use the $12.99 original price.