Delivery Time as a Selling Point: When Speed Matters More Than Price

What customers are really negotiating about

A customer asks for a quote for a spare part, a custom product, or an installation job. The conversation quickly turns to price. The business grants a discount, and the order comes in. Only later does it turn out that the customer had hesitated for a completely different reason: he needed the work done in two weeks, not six. He would have paid more for faster delivery. Nobody had asked him.

That raises one question: when does delivery time matter more than price to business customers, and how does a business use this without overcommitting? To answer it, we first clarify the terms, then introduce Stalk’s model of time-based competition, review what a large study of real orders shows, weigh speed against reliability, and finally derive a test and rules for rush orders.

If you only talk about price, you sell below value when the customer actually wants to buy time.

Terms: delivery time, on-time delivery, cost of waiting

Delivery time is the period between the order and delivery or completion at the customer. On-time delivery is the share of orders delivered on the promised date. The two are often confused. A business with a six-week delivery time and high on-time delivery is more pleasant for many customers than one that promises three weeks and regularly delivers two weeks late.

The cost of waiting is what the customer loses or incurs additionally as long as the service is missing: a machine standing still, a postponed project deadline, a missed sales launch, stopgap solutions. It is the basis for any justification of a time surcharge, and it varies greatly from customer to customer. The guide Expressing customer value in euros explicitly names time savings as one of the four sources of value.

The mental model: Stalk’s time-based competition

George Stalk (1988) traced the development of leading Japanese companies after World War II. Their advantage was based first on low wages, then on scale, then on focused factories, and finally on flexible manufacturing that allowed variety without higher costs. Stalk saw the next step in time: companies that develop, produce, and deliver faster than their competitors gain an advantage that does not express itself in a lower price.

The core of the model is a shift in perspective. Instead of asking how to cut costs, you ask where time is lost in the process. In most businesses, only a small part of the lead time is spent actually working on an order. The rest is waiting: for an approval, for materials, for a free slot in the schedule. Shortening this waiting time often costs less than any price cut and brings the customer more. The article Goldratt’s theory of constraints shows that the throughput of a process is determined by its bottleneck and that improvements elsewhere hardly change the delivery time.

What real orders show about speed and price

For a long time, knowledge about supplier selection rested mainly on surveys in which buyers usually ranked quality first. Hu, Kong, and Jia (2025) instead analyzed real orders. Their data come from a Chinese B2B platform on which manufacturers offer spare production capacity and retailers place orders. In apparel, the platform’s largest category, they studied 21,249 orders with 440 suppliers and 18 attributes covering price, quality, speed, and service.

The result contradicts the surveys. Speed and price were the most important for selection, followed by quality, and finally service. A metric for the supplier’s production speed accounted for around 20 percent of the explanation of orders in their model, price for around 11 percent. For orders under 300 units, a one percent improvement in this metric corresponded to a price premium of around 3.8 percent that retailers were willing to pay.

The differences are particularly revealing. As order size grew, price and quality became more important, while speed and service lost considerable weight. For trendy, short-lived products, speed and service mattered more; for long-running standard products, price did. The study covers one market, one platform, and mainly one industry. But its pattern is well founded: those who order little and must react quickly pay for time. Those who order a lot and can plan long in advance pay for price.

Two views: speed or reliability

The first view follows Stalk. Speed is a selling point in its own right that can be priced and takes the business out of price comparison. The findings of Hu and colleagues support this, at least for small orders and short-lived products.

The second view emphasizes reliability. A customer plans with the promised date. A fast promise that is not kept costs him more than a slow one that is. The essay Service as a differentiator describes a study by Agag (2019) in which reliability and the absence of deception had the strongest effect on the loyalty of business customers. According to Levitt’s model of product levels, on-time delivery belongs to the expected product: the customer takes it for granted.

I consider both views correct and see a clear order. On-time delivery must be right first, because it is the promise. Only then does it pay to sell speed as an additional offer. Anyone who promises faster than he can deliver turns a selling point into a reason for customers to leave.

The time-value test: when speed matters more than price

From these findings, a short test can be derived that I call the time-value test. It helps you recognize in the first conversation whether a customer is buying time or a price. The more questions are answered with yes, the more it pays to talk about delivery time rather than price.

• Does the customer incur costs as long as the service is missing, such as downtime, contractual penalties, or stopgap solutions?
• Is the order quantity small relative to the customer’s total demand?
• Is a fixed deadline tied to the delivery, such as project completion, a season, or an acceptance date?
• Is the product short-lived or frequently modified?
• Has the customer had bad experiences with late suppliers?

If the first question is answered yes, it pays to estimate the cost of waiting together with the customer. The following worked example shows how widely it can differ depending on delivery time.

In the example, the spare part normally costs 4,000 euros. A rush surcharge of 25 percent, that is, 1,000 euros, is a good deal for both the customer and the business, measured against 12,000 euros in saved cost of waiting. A 5 percent discount on the normal price, by contrast, would have brought the customer only 200 euros and cost the business contribution margin.

Offering speed without overcommitting

Speed is not free. Delivering at short notice requires free capacity, materials in stock, or the ability to postpone other orders. That is why it belongs in a deliberately designed offer and not in every promise.

1. Measure on-time delivery

   For three months, record how many orders were completed on the promised date. Only when this figure is right is speed a credible selling point.

2. Find waiting times

   For a typical order, record how many days are spent working and how many waiting. The longest waiting time is the first place to start.

3. Reserve capacity for rush orders

   Plan a fixed part of the week for short-notice orders. The guide Capacity planning describes how.

4. Price the rush option

   Next to the standard date, offer a rush option with a surcharge. It is a difference in timing that the customer can understand.

5. Promise only on the basis of the schedule

   Anyone who promises a delivery time checks the schedule first. A promise made in the heat of the conversation is a bet at the customer’s expense.

A rush surcharge is a form of price differentiation. The article Price differentiation requires a justification test for it: every price difference needs a difference in service, quantity, timing, or effort that the customer can understand. Timing is the justification here, and it holds as long as all customers receive the same rush option on the same terms. As a separate tier in the offer, it can be presented as described in the guide Good, better, best.

Transfer: time as part of positioning

Beyond the individual order, speed can become part of a business’s positioning. A business known for reliably short delivery times is specifically sought out by a certain kind of customer, especially those with high costs of waiting. The guide Sharpening your positioning describes how such a difference is captured in the positioning statement.

The limits are just as clear. Speed can be copied if it rests only on additional staff. It is harder to copy when it arises from a process with little waiting time. For large customers with long planning horizons and large quantities, price will remain more important, as the findings of Hu and colleagues show. And the study comes from a single market. Whether the weights are similar in German mid-sized businesses cannot be inferred from it. But the pattern is plausible enough to test in your own sales.

What remains and how to start

When does delivery time matter more than price to business customers? When waiting costs them money, when they order small quantities, when a fixed deadline is tied to the delivery, and when the product is short-lived. The analysis of real orders shows that speed can then even be more important than price. But this can be used only if on-time delivery is right, the promise rests on the schedule, and speed is offered as a separate option with its own price.

1. This week: Count how many orders in the last quarter were completed on the promised date.
2. Next week: In your next first conversation, ask the questions of the time-value test before talking about price.
3. In a month: Define a rush option with a surcharge and reserved capacity and add it to your standard offer.

A customer who wants to buy time is grateful for a discount. For a fast delivery that is kept, he stays.