--- title: "How do you check customer concentration before buying a website or small SaaS?" url: https://firstpassmemo.com/answers/how-to-check-customer-concentration-before-buying-a-website/ updated: 2026-10-27 publisher: FirstPass Memo (hello@firstpassmemo.com) --- Answers # How do you check customer concentration before buying a website or small SaaS? Short answer: Ask the seller for revenue by customer, sponsor, affiliate program and ad network for the last 12 months, then work out what share the top one and top five bring in. If one source is above about a quarter of revenue, confirm it will stay after the sale, and price or hold back part of the deal against losing it. Updated 27 October 2026 · Figures checked against their sources on 27 October 2026 · By Joan Murphy (https://firstpassmemo.com/about/joan-murphy/) (pen name) · How we check (https://firstpassmemo.com/methodology/) · Corrections (https://firstpassmemo.com/editorial-policy/) ## Check a listing now, free FirstPass Memo offers a free red-flag checker for business-for-sale listings and a $79 first-pass memo on a specific listing you send, paid after delivery. Paste any listing below for payback, the asking multiple and its red flags. Nothing you paste leaves your browser. Open the full checker (https://firstpassmemo.com/checker/) to unlock every flag with its seller question. Only know the price and monthly profit? Put them in the link and the check runs on its own: firstpassmemo.com/checker/?ask=45000&profit=1500 (https://firstpassmemo.com/checker/?ask=45000&profit=1500&via=box). ## What is customer concentration? Customer concentration is how much of a business's revenue comes from a few sources. In a small SaaS it is usually a handful of large accounts. In a content site it is one affiliate program, one ad network or one sponsor. In a newsletter it can be one advertiser who books every issue. If that one source leaves after you buy, the profit you paid a multiple on leaves with it. Listings rarely say. In our red-flag index (https://firstpassmemo.com/red-flag-index/) of 94 public Empire Flippers listings read between 14 and 27 October 2026, every one left customer or revenue concentration undisclosed. That does not mean every listing is concentrated; it means you have to ask. ## What should you ask the seller for? - Revenue by source for the last 12 months: by customer for SaaS and service businesses, by program or network for affiliate and ad income, by sponsor for newsletters and channels. Monthly, not just a year total. - The share of the top one and top five sources. Work it out yourself from the export rather than taking a summary figure. - Contract terms for the biggest sources: monthly or annual, renewal date, and whether the agreement can move to a new owner. Affiliate and ad accounts often cannot transfer, so you may have to reapply. - Who the relationship is with. If the top customer or sponsor deals with the seller personally, ask whether they will introduce you before closing. - Any customer lost in the last year and what share of revenue went with it. This shows how the business copes when a large source leaves. Check the export against the processor or network dashboards you are already reviewing; see how to verify Stripe revenue (https://firstpassmemo.com/answers/how-to-verify-stripe-revenue-before-buying-a-saas/) and how to verify affiliate income (https://firstpassmemo.com/answers/how-to-verify-affiliate-income-before-buying-a-website/). ## How much concentration is too much? Our rule of thumb, not an industry standard: when one source is more than about a quarter of revenue, treat it as a deal term, not a footnote. Our checker raises the top customer above 25% of revenue (https://firstpassmemo.com/flags/top-customer-over-25-percent/) flag at that point, and the concentration not disclosed (https://firstpassmemo.com/flags/concentration-not-disclosed/) flag when a listing gives no breakdown at all. A business where the top five sources bring in most of the money needs the same care even if no single one crosses 25%. ## What should worry you? - The seller will not share revenue by customer or by source, only totals. - The biggest customer signed recently, or renewed on a short term just before the listing went up. - The top source is a related party: the seller's other company, a friend's agency, or a past employer. - One affiliate program or ad network on a young site; see the single affiliate or ad network (https://firstpassmemo.com/flags/single-affiliate-or-ad-network-on-a-young-site/) flag. - The relationship depends on the seller, and they will not introduce you. ## How do you price the risk? Value the business twice: once as listed, and once without the largest source. If the price only works with that source, move part of the price into terms that depend on it staying, such as a holdback, an earn-out or seller financing (https://firstpassmemo.com/answers/how-does-seller-financing-work-when-buying-a-website/), rather than paying it all at closing. This is a composite example, not a real deal. A small SaaS earns $3,000 a month in profit and is listed at $90,000, which is 30 months of profit. One agency customer pays $1,100 a month, about 37% of revenue, on a monthly plan. Without that customer, profit would be roughly $1,900 a month. The buyer offers $72,000: $57,000 at closing and $15,000 held back for six months, released only if the agency is still paying at month six. Run the listing through the free red-flag checker (https://firstpassmemo.com/checker/) first; it flags missing concentration data before you spend time on calls. ## Frequently asked questions ### Does concentration matter for a content site? Yes. A content site that earns most of its money from one affiliate program or one ad network depends on that program's rates and rules. A commission cut or a closed account has the same effect as losing a large customer. ### What if the seller says customer names are confidential? Ask for the breakdown with names hidden, such as Customer A to Customer E with monthly revenue for each. You need the shares and the contract terms, not the names, until later in diligence. ### Is an annual contract with the top customer enough protection? It helps, but check whether the contract can move to a new owner and when it renews. A contract that ends a few months after closing protects you less than it looks. ## Sources - FirstPass Memo, red-flag checker rules (https://firstpassmemo.com/flags/), our own rules, published as /rules.json - FirstPass Memo, seller question bank, October 2026 (general checklist) (https://firstpassmemo.com/get/seller-questions-general), our own questions - FirstPass Memo, free buyer calculators (https://firstpassmemo.com/tools/), our own calculators; the formulas are on each page ## Related - Free red-flag checker (https://firstpassmemo.com/checker/) - Red flag: concentration not disclosed (https://firstpassmemo.com/flags/concentration-not-disclosed/) - Red flag: top customer above 25% of revenue (https://firstpassmemo.com/flags/top-customer-over-25-percent/) - Listing red-flag index (https://firstpassmemo.com/red-flag-index/) - Questions to ask a SaaS seller before an LOI (https://firstpassmemo.com/answers/questions-to-ask-a-saas-seller-before-an-loi/) - How to verify affiliate income (https://firstpassmemo.com/answers/how-to-verify-affiliate-income-before-buying-a-website/) - Small SaaS due diligence checklist (https://firstpassmemo.com/answers/due-diligence-checklist-for-buying-a-small-saas/) - How seller financing works (https://firstpassmemo.com/answers/how-does-seller-financing-work-when-buying-a-website/) - Glossary of listing terms (https://firstpassmemo.com/glossary/) - More questions buyers ask (https://firstpassmemo.com/answers/) Composite examples are invented and labelled. Figures from other sites are quoted with a link and the date we read them; FirstPass figures are asking prices and seller-stated profit, not sale prices. Informational screening only, not investment, legal or tax advice. ## Looking at a specific listing? Get a full memo — $79, pay after delivery. Paste the link; your memo arrives within 24 hours (Mon–Fri). $79, pay after delivery: we send the memo first, then a payment link. Human quick reviews cost $199–$390. --- FirstPass Memo is informational screening, not investment, legal, tax, accounting or valuation advice, and not an audit. Seller figures are not independently verified. HTML version: https://firstpassmemo.com/answers/how-to-check-customer-concentration-before-buying-a-website/