Capital Insights

Customer Concentration: Measure the Cost of Serving the Largest Account

Medro Advisors · Research and commentary from Don McClain

By Don McClain | Founder & Principal, Medro Advisors

The archived growth-readiness review flags customer concentration. Add a customer-level contribution check: start with revenue, then deduct the labor, freight, returns and support directly required to serve that account. Keep shared overhead separate and explain the allocation method. Compare the account’s revenue share with its contribution and collection pattern. A large customer can absorb capacity without producing a matching cash benefit. Use the result to test growth priorities, not to assume the customer should be dropped.

Source: Medro archive, September 9, 2026.
Author: https://www.donmcclain.net/
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