What Is Buyer Concentration

buyer concentration. noun [ U ] ECONOMICS. the degree to which a small number of customers buy most of a company’s product: Buyer concentration reduces profitability primarily in competitive industries.

What does concentration in business mean?

Concentration refers to the extent to which a small number of firms or enterprises account for a large proportion of economic activity such as total sales, assets or employment.

Is Market Concentration good or bad?

Increasing concentration can be a good or a bad sign for the health of a competitive market. If it is good, then concentration should be associated with lower prices and higher productivity. If bad, concentration would be associated with higher prices and lower productivity.