Concentration of Risk

12 Months Ended

Mar. 31, 2013

Concentration of Risk [Abstract]

Concentration of Risk

Note 17. Concentration of Risk

Sales to customers and purchases from vendors are largely governed by individual sales or purchase orders, so there is no guarantee of future business. In some cases, the Company has more formal agreements with significant customers or vendors, but they are largely administrative in nature and are terminable by either party upon several months or otherwise short notice and they typically contain no obligation to make purchases from TESSCO. In the event a significant customer decides to make its purchases from another source, experiences a significant change in demand internally or from its own customer base, becomes financially unstable, or is acquired by another company, the Company's ability to generate revenues from these customers may be significantly affected, resulting in an adverse affect on its financial position and results of operations.

The Company is dependent on third-party equipment manufacturers, distributors and dealers for all of its supply of wireless communications equipment. For fiscal years 2013, 2012 and 2011, sales of products purchased from the Company's top ten vendors accounted for 42%, 43% and 40% of total revenues, respectively. In fiscal year 2013, 2012 and 2011, sales of product purchased from the Company's largest vendor, Otter Products LLC, a significant portion of which are sold to the Company's largest customer AT&T Mobility, accounted for approximately 9%, 17% and 13% of total revenues, respectively. The Company is dependent on the ability of its vendors to provide products on a timely basis and on favorable pricing terms. Although the Company believes that alternative sources of supply are available for many of the product types it carries, the loss of certain principal suppliers, or the loss of one or more of certain ongoing affinity relationships, could have a material adverse effect on the Company.

As noted, the Company's future results could also be negatively impacted by the loss of certain customers, and/or vendor relationships. For fiscal years 2013, 2012 and 2011, sales of products to the Company's top ten customer relationships accounted for 39%, 45% and 37% of total revenues, respectively. In fiscal years 2013, 2012 and 2011, sales to the Company's top customer relationship, AT&T Mobility, a top tier cellular carrier purchasing phone accessories classified in the Retail segment, accounted for approximately 30%, 36% and 28% of total revenues, respectively.

In April 2012, we were notified by AT&T of their intention to transition their third party logistics retail store supply chain business away from us beginning in the second quarter of our fiscal 2013. As of the close of our fiscal 2013 this business has fully transitioned.