How do I assess a courier firm’s dependence on one e-commerce client?

Concentration is a normal feature of courier businesses, but it changes how you should look at everything else. Start with the revenue report by customer, going back as far as the records allow. Is the client’s share growing, shrinking or steady? Look at margin too. Sometimes the biggest client is the least profitable because of tight rates, long waits at pickup or heavy peak demand.

Then read the contract. Check how long it runs, how much notice either side must give, whether rates can be changed, and whether the client can bring volume in-house or move to another carrier. Ask if the contract is assigned automatically on a sale or needs the client’s consent. A client with no written agreement is an even bigger concern.

Finally, think about the relationship. Who handles the account, and would they stay? Does the client use other carriers as well? What is the plan if volume drops? Ask the seller whether the client knows about the sale and whether a conversation can be arranged before closing. Your lawyer can add protections, such as conditions tied to the client’s continued support. Ask what the firm has done to find other customers lately, since effort to diversify tells you how the owner views the risk.

Key takeaways

• Look at revenue share and margin by customer over time.
• Read notice, exclusivity and assignment terms in the contract.
• Ask to speak with the client before closing.