{"id":7853,"date":"2021-05-12T09:44:56","date_gmt":"2021-05-12T15:44:56","guid":{"rendered":"https:\/\/www.englandlogistics.com\/?p=7853"},"modified":"2021-05-19T14:12:34","modified_gmt":"2021-05-19T20:12:34","slug":"customer-concentration-good-or-bad","status":"publish","type":"post","link":"https:\/\/www.englandlogistics.com\/customer-concentration-good-or-bad\/","title":{"rendered":"Customer Concentration — Good or Bad?"},"content":{"rendered":"

Have you ever heard the phrase, \u201cDon\u2019t put all your eggs in one basket?\u201d In the business world, this phrase means you should avoid doing the majority of your business with just one or a few customers. Most credit companies consider your customer concentration<\/a> when reviewing credit applications. If 25% of your revenue is coming from one customer, you are concentrated. As a wise trucker once said, \u201cIf one customer makes up the majority of your revenue, you don\u2019t own your business, that customer does.\u201d<\/p>\n

How can you diversify your customer base? Sometimes working with new customers requires some extra work on your part. To help, we\u2019ve put together four tips for avoiding customer concentration.<\/p>\n

Work with Credit-Worthy Shippers<\/strong><\/p>\n

In trucking, and in other business, it can be a common fear that a company you\u2019ve hauled for will quickly go out of business before the bill is paid. We suggest you choose to work with credit-worthy brokers and shippers and conduct credit checks on each.<\/p>\n

Look Beyond the Rate<\/strong><\/p>\n

If the rate is too good to be true, there\u2019s usually a reason behind it. Many shippers and brokers who have poor credit are aware it\u2019s bad. They know their pool of carriers to haul freight is smaller, because good carriers won\u2019t take the risk. Or the carrier\u2019s factoring company won\u2019t approve the credit. If the broker has a smaller pool of carriers to choose from, they will have to pay a higher rate to compete.<\/p>\n

Ensure Willingness to Pay<\/strong><\/p>\n

Even if you haul for the most credit-worthy brokers, there is still could be an issue of ability to pay. Bad debt can happen even from the most credit-worthy for a variety of reasons \u2013 insurance claims, missing or illegible paperwork, damage to freight, missed appointment, or issues with relationships arise. If the majority of your business is with one company and something happens, your business could be an issue of willingness to pay.<\/p>\n

Select Varying Industries<\/strong><\/p>\n

Another area of concentration to consider is choosing which industries you work with. While spreading your business across multiple industries may be tough, it\u2019s another way to protect yourself in economic downturns. For example, carriers whose business was heavily concentrated in hauling for the automotive industry really struggled when the factories were recently shut down. Depending on your equipment, you may be able to pivot your business easier than other carriers. Also, working with brokers give some additional flexibility, as they are generally not concentrated in one industry.<\/p>\n

As you build your business, always consider how you\u2019ve divided your customer base. Many carriers take a big leap with a relationship by adding several lanes with a broker or shipper who has treated them well. That\u2019s good business. Just make sure to remember you\u2019re filling your client roster with other customers as well to offset the risk with your bigger customers.<\/p>\n

 <\/p>\n

###<\/p>\n

\u00a0<\/em><\/p>\n

The <\/em>England Carrier Services (ECS) division<\/em><\/a> offers a variety of services for carriers ranging from maintenance to support. As ECS members, carriers have access to nationwide discounts on fuel and tires from dedicated team members who are committed to finding the best price. ECS also provides factoring services with benefits such as same-day funding to a bank account or fuel card. These options allow carriers the freedom to focus on growing their business while saving time and money.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Have you ever heard the phrase, \u201cDon\u2019t put all your eggs in one basket?\u201d In the business world, this phrase means you should avoid doing the majority of your business with just one or a few customers. Most credit companies consider your customer concentration when reviewing credit applications. If 25% of your revenue is coming… Read more »<\/a><\/p>\n","protected":false},"author":12,"featured_media":7898,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"libsyn-item-id":0,"libsyn-show-id":0,"libsyn-post-error":"","libsyn-post-error_post-type":"","libsyn-post-error_post-permissions":"","libsyn-post-error_api":"","playlist-podcast-url":"","libsyn-episode-thumbnail":"","libsyn-episode-widescreen_image":"","libsyn-episode-blog_image":"","libsyn-episode-background_image":"","libsyn-post-episode-category-selection":"","libsyn-post-episode-player_use_thumbnail":"","libsyn-post-episode-player_use_theme":"","libsyn-post-episode-player_height":"","libsyn-post-episode-player_width":"","libsyn-post-episode-player_placement":"","libsyn-post-episode-player_use_download_link":"","libsyn-post-episode-player_use_download_link_text":"","libsyn-post-episode-player_custom_color":"","libsyn-post-episode-itunes-explicit":"","libsyn-post-episode":"","libsyn-post-episode-update-id3":"","libsyn-post-episode-release-date":"","libsyn-post-episode-simple-download":"","libsyn-release-date":"","libsyn-post-update-release-date":"","libsyn-is_draft":"","libsyn-new-media-media":"","libsyn-post-episode-subtitle":"","libsyn-new-media-image":"","libsyn-post-episode-keywords":"","libsyn-post-itunes":"","libsyn-post-episode-itunes-episode-number":"","libsyn-post-episode-itunes-season-number":"","libsyn-post-episode-itunes-episode-type":"","libsyn-post-episode-itunes-episode-title":"","libsyn-post-episode-itunes-episode-author":"","libsyn-destination-releases":"","libsyn-post-episode-advanced-destination-form-data":"","libsyn-post-episode-advanced-destination-form-data-enabled":"","libsyn-post-episode-advanced-destination-form-data-input-enabled":false,"libsyn-post-episode-premium_state":"","libsyn-episode-shortcode":"","libsyn-episode-embedurl":"","footnotes":""},"categories":[377],"tags":[],"yoast_head":"\nCustomer Concentration -- Good or Bad? | England Logistics<\/title>\n<meta name=\"description\" content=\"Customer concentration is problematic when you're depending on one customer to supply the majority of your business. 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