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Customer concentration

How much of a company's revenue depends on a few customers or sales partners. The higher it is, the more losing one of them would hurt.

Simple example

One shop sells to 20 customers who each bring in about 5% of revenue. Another gets 60% of its revenue from just two customers. If the second shop loses one of them, 30% of its sales disappear overnight.

Spread out: 20 customers, about 5% eachConcentrated: 2 customers bring in 60%30%30%everyone else 40%Lose one big customer and 30% of revenue is gone.
Made-up numbers, for illustration only.

Related terms

SegmentsThe business lines or regions a company reports separately.Net revenue retention (NRR)How much more, or less, existing customers spend a year later.Risk factorsThe 10-K section listing what could seriously hurt the business.