When you charge more for rush orders, what happens when you shorten standard lead times? No surprise, fewer people pay for faster delivery, but there’s a big upside.
.avif)
When we launched our on-demand fabrication service six years ago, our default lead time was two weeks. By the end of 2019, we had dropped our standard lead time to five business days.
We also realized that with our order processing automation, we could serve our customers even more quickly, albeit at a higher price. In early 2020, we enabled same-day production. Customers could upload a part, get an instant price, submit an order, and have a prototype sitting on their desks the next day. For the next four years, we left our lead time and pricing model mostly unchanged.
Rush economics worked out well for us. In fact, rush pricing has accounted for roughly half our net income. Higher margins have made it easier to hire and retain great workers, buy new equipment, and improve our services. That’s a win for our customers, our employees, and our company.
.avif)
