One supplier takes 58% of cost of sales. Nobody has priced the alternative.

Customer concentration attracts a valuation discount. Supplier concentration usually attracts a volume rebate, yet the two dependencies behave far more alike than most ledgers admit.

By Steve 5 min read
Abstract bridge artwork for One supplier takes 58% of cost of sales. Nobody has priced the alternative.

Most businesses can tell you, to the percentage point, how much of revenue sits with their largest customer. The number gets watched because buyers, lenders and boards ask about it. Ask the same business what share of cost of sales goes to its largest supplier, and the answer usually arrives slower, and often from a different person. Yet both are dependency, and only one of them has a rebate attached that makes it feel like a win. The asymmetry matters because supplier concentration rarely announces itself. Customer concentration is visible…

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