Client concentration in gross profit

Definition

The share of GROSS PROFIT one client produces, which is never the revenue share.

Why It Matters

Staffing revenue is mostly pass-through wages, so a client that is a quarter of revenue can be half of the margin or almost none of it depending on the spread it carries. Measuring concentration on revenue therefore understates the risk on high-spread accounts and overstates it on low ones. Rebuild the top ten clients by gross profit before pricing the book, because that ranking is usually not the one the seller presents.