The Cost-to-Serve Index · 2026

How much profit hides inside cost-to-serve?

An annual proprietary barometer built from the TDABC models we deliver. Composite, anonymised and aggregated with client consent.

Where does your business sit? See the findings
Cost and Profitability Consulting · 25 years of TDABC · CostCTRL platform
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In the distribution and logistics models we build, roughly a third of customers contribute negatively to profit once the true cost of serving them is attributed. The business is still profitable overall. It just does not know where.

A composite read across engagements, anonymised and aggregated with client consent. Figures are illustrative of the pattern, not a statistical survey. The 2026 edition will firm up the sample.

The shape behind the Index. Cumulative profit peaks above 100 percent on the best customers, then the loss-making tail pulls it back. The peak is the recoverable margin.
01What the models keep showing
20-40%

of customers contribute negatively after cost-to-serve, concentrated in the long tail of small, frequent, complex orders.

>100%

cumulative profit peaks well above the reported total before the loss-making tail drags it back. The gap is recoverable margin.

Rarely cut

the answer is almost never to drop customers. It is to re-price, consolidate orders, and match effort to value.

Method. The Index is built from the TDABC operating models we deliver, attributing operational cost down to individual customers and orders. Each contributing engagement is anonymised; only aggregate patterns appear here. We publish it once a year and date every figure.
02From pattern to result

One distributor turned this pattern into a multi-year turnaround: 1.335 million euros of negative contribution, roughly halved.

The difference between knowing a loss-making tail exists and knowing exactly who is in it.

03Frequently asked questions

About the Index.

What is the Cost-to-Serve Index?
It is an annual read on how much profit hides inside cost-to-serve. It is built from the TDABC operating models we deliver, attributing operational cost down to individual customers and orders. We publish it once a year and date every figure.
How many customers contribute negatively?
In the distribution and logistics models we build, roughly a third of customers contribute negatively to profit once the true cost of serving them is attributed. The business is still profitable overall. It just does not know where. Typically between 20 and 40 percent of customers, concentrated in the long tail of small, frequent, complex orders.
Is the answer to drop loss-making customers?
Almost never. The answer is to re-price, consolidate orders, and match effort to value. Cumulative profit usually peaks well above the reported total before the loss-making tail drags it back. That gap is recoverable margin.
Start with the Profit Check

Where does your business sit on the Index?

The Profit Check gives you a first read in five minutes.

Take the Profit Check See the cost-to-serve method