{"id":9334,"date":"2022-03-31T16:12:09","date_gmt":"2022-03-31T22:12:09","guid":{"rendered":"https:\/\/www.englandlogistics.com\/?p=9334"},"modified":"2022-11-21T07:57:14","modified_gmt":"2022-11-21T14:57:14","slug":"risk-of-customer-concentration","status":"publish","type":"post","link":"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/","title":{"rendered":"The Risk of Customer Concentration"},"content":{"rendered":"

Have you ever heard the phrase, \u201cDon\u2019t put all your eggs in one basket\u201d? This phrase means you should avoid doing the majority of your business with just one or a few customers in the business world. Most credit companies consider your<\/a>\u00a0customer concentration\u00a0when reviewing credit applications. If 25% of your revenue comes from one customer, you are concentrated. As a wise trucker once said, \u201cIf one customer makes up most 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

 <\/p>\n

Work with Credit-Worthy Shippers<\/strong><\/h4>\n

In trucking and other businesses, 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 work with credit-worthy brokers and shippers and conduct credit checks on each.<\/p>\n

 <\/p>\n

Look Beyond the Rate<\/strong><\/h4>\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 terrible. 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

 <\/p>\n

Ensure Willingness to Pay<\/strong><\/h4>\n

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

 <\/p>\n

Select Varying Industries<\/strong><\/h4>\n

Another area of customer concentration to consider is choosing which industries you work with. While spreading your business across multiple sectors may be challenging, it\u2019s another way to protect yourself in economic downturns. For example, carriers whose business was heavily concentrated in hauling for the automotive industry struggled when the factories were shut down. Depending on your equipment, you may be able to pivot your business more accessible 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 giant 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 fill your client roster with other customers to offset the risk with your more significant customers.<\/p>\n

 <\/p>\n

\u2014<\/p>\n

The\u00a0<\/em>England Carrier Services (ECS) division<\/em><\/a>\u00a0offers various 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 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<\/div>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Have you ever heard the phrase, \u201cDon\u2019t put all your eggs in one basket\u201d? This phrase means you should avoid doing the majority of your business with just one or a few customers in the business world. Most credit companies consider your\u00a0customer concentration\u00a0when reviewing credit applications. If 25% of your revenue comes from one customer,… Read more »<\/a><\/p>\n","protected":false},"author":3,"featured_media":9336,"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":[5603,377],"tags":[],"yoast_head":"\nCustomer Concentration and Risks to Your Business<\/title>\n<meta name=\"description\" content=\"Always consider how you\u2019ve divided your customer base. 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If 25% of your revenue comes from one place, you're risking customer concentration.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/\" \/>\n<meta property=\"og:site_name\" content=\"England Logistics\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/englandlogistics\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-03-31T22:12:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-21T14:57:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.englandlogistics.com\/wp-content\/uploads\/2022\/03\/customer-concentration.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"541\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Wendy Barclay\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@englandlogistic\" \/>\n<meta name=\"twitter:site\" content=\"@englandlogistic\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Wendy Barclay\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/\"},\"author\":{\"name\":\"Wendy Barclay\",\"@id\":\"https:\/\/www.englandlogistics.com\/#\/schema\/person\/a6a3fd6d012fa95234e524bf1df31d6f\"},\"headline\":\"The Risk of Customer Concentration\",\"datePublished\":\"2022-03-31T22:12:09+00:00\",\"dateModified\":\"2022-11-21T14:57:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/\"},\"wordCount\":557,\"publisher\":{\"@id\":\"https:\/\/www.englandlogistics.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.englandlogistics.com\/wp-content\/uploads\/2022\/03\/customer-concentration.jpg\",\"articleSection\":[\"Carrier Connection\",\"England Carrier Services\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/\",\"url\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/\",\"name\":\"Customer Concentration and Risks to Your Business\",\"isPartOf\":{\"@id\":\"https:\/\/www.englandlogistics.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.englandlogistics.com\/risk-of-customer-concentration\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.englandlogistics.com\/wp-content\/uploads\/2022\/03\/customer-concentration.jpg\",\"datePublished\":\"2022-03-31T22:12:09+00:00\",\"dateModified\":\"2022-11-21T14:57:14+00:00\",\"description\":\"Always consider how you\u2019ve divided your customer base. 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