tag:blogger.com,1999:blog-7294165939647321702.post2250929255003299406..comments2024-03-11T10:31:06.107-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: When Customers Are Too FewSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7294165939647321702.post-33469796280321894532009-06-25T00:35:05.146-04:002009-06-25T00:35:05.146-04:00It may certainly add efficiencies, but the point o...It may certainly add efficiencies, but the point of the article is to encourage consideration to the risk of the revenues (and as a result, the earnings).<br /><br />I agree that when there are contracts, this mitigates risk. In many cases, however, there are no contracts. An examination of the company's annual report should reveal whether this is the case.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-20340399411974299952009-06-24T20:46:25.815-04:002009-06-24T20:46:25.815-04:00Does selling a fair bit of product to the same cus...Does selling a fair bit of product to the same customers also add efficiencies though? For example, sales may be more steady (enabling a company to take advantage of efficiences of scale in production and lower storage costs), lower levels of inventory would need to be kept on hand, etc.<br /><br />I assume that the supplier would enter into agreements with Walmart, Target, etc. that stipulate volume and price of goods sold. The supplier may be extra vulnerable when these contracts reach their end. While they are in effect though, wouldn't these companies be less risky than companies that may, at any time, be faced with inventory pile-ups, etc.?Anonymousnoreply@blogger.com