Supplier portfolio model
See how every supplier contributes to portfolio economics, customer demand, capital usage, and strategic position.
Understand where power sits. Capture more of the value you create.
Commercial Physics helps food distributors understand how capital, demand, dependency, contribution, and bargaining power interact across their supplier portfolio — then turn that position into better economics, stronger terms, and strategic participation.
Supplier portfolioILLUSTRATIVE DISTRIBUTOR PORTFOLIO
SupplierPositionCapitalCustomer needCommercial state
ChompsGrow$2.1MHighExpansion
HeinzMaintain$800KHighCore
Liquid DeathRebalance$1.4MHighTerms misaligned
LesserEvilReview$1.1MMediumCapital intensive
C4 EnergyParticipate$950KHighStrategic upside
See the physics of every relationship.
Every supplier relationship is shaped by competing forces: margin, working capital, customer demand, switching costs, supplier dependence, contractual protections, and market access. Commercial Physics models those forces together so you can see where the relationship is balanced — and where it is not.
Juniper Beverages
COMMERCIAL IMBALANCERelationship forces
16%margin
$1.4Mcapital committed
38%key-account exposure
Highsupplier dependence
CurrentModeled terms
Net 30→Net 60
16% margin→18%+
No inventory protection→Return protection
Measure what you contribute beyond distribution.
A distributor can create value that never appears in its own P&L. Commercial Physics measures the accounts opened, geography created, growth accelerated, inventory financed, customer access provided, and market position built for each supplier. Then it compares that contribution with what the distributor receives in return.
C4 Energy
MODELED DISTRIBUTOR CONTRIBUTION84accounts opened
+62%regional sales growth
Newgeography established
Highdependence on distributor network
VALUE CAPTURE GAP
Commercial economics→Better terms→Information rights→Exclusivity→Milestone warrants
Find where value and economics diverge.
The most important supplier relationships are not always the highest-margin ones. Commercial Physics models the gap between value created for the supplier and value captured by the distributor. When that gap becomes large enough, the relationship may justify more than ordinary distribution economics.
Value created for the supplierAccounts · Growth · Market access
Value captured by the distributorMargin · Terms · Rights
VALUE CAPTURE GAP
Turn commercial leverage into durable rights.
Commercial leverage disappears if it is never converted into something durable. Commercial Physics helps distributors structure, track, and manage the rights created through strategically important supplier relationships.
C4 Energy / Strategic Participation
MODELED RIGHTS SCENARIORightStatusNext event
Information rightsActiveQ3 financials received
Board observerActiveMeeting Oct. 14
Pro rata rightsActiveNo open round
Milestone warrants2/3 vested18 accounts remaining
Q4 financials due in 18 days
Understand how the portfolio moves as a system.
Supplier decisions do not happen in isolation. Reducing one supplier may free working capital but weaken a customer relationship. Growing another may improve gross profit but increase inventory concentration. Negotiating stronger terms may create capacity for several new brands. Commercial Physics models these interactions across the portfolio before you act.
Portfolio scenario model
DecisionPotential gainPortfolio constraint
Reduce a supplierRelease working capitalProtect customer demand
Grow a supplierIncrease gross profitWatch inventory concentration
Renegotiate termsCreate capacitySupport new brands
Reallocate toward the highest-value relationships.
When supplier economics improve or strategic rights create realizable value, Commercial Physics helps determine where that value should move next.
Capital redeploymentMODELED CAPITAL REDEPLOYMENT
$1.8MRealized value
$750KOpportunity reserve
$500KGrowth suppliers
$350KCapacity expansion
$200KLiquidity
The goal is not simply to improve individual supplier relationships. It is to continuously improve the economics of the entire commercial system.
Model library
What can you model with Commercial Physics?
Portfolio Physics
Capital intensity
Measure how much working capital each relationship consumes relative to the value it produces.
Customer gravity
Identify suppliers whose customer demand makes them difficult to reduce or replace.
Supplier dependence
Measure how dependent a supplier is on your accounts, geography, infrastructure, and market access.
Portfolio scenarios
Model grow, maintain, renegotiate, reduce, and exit decisions before making them.
Contribution Physics
Distributor contribution
Measure the accounts, growth, geography, capital, infrastructure, and access you create for suppliers.
Value capture gap
Identify where supplier value creation exceeds the economics you receive.
Growth attribution
Estimate how much supplier growth can reasonably be attributed to your distribution network.
Replacement difficulty
Understand how easily either side could replace the relationship.
Relative leverage
Model where bargaining power actually sits — not just what the contract says.
Contract Physics
Contract diagnosis
Find where margin, payment terms, inventory risk, rebates, protections, or obligations are misaligned with the relationship.
Negotiation targets
Translate commercial imbalance into specific terms worth pursuing.
Current vs. modeled terms
Compare the agreement that exists with the agreement the underlying economics support.
Negotiation scenarios
Model how changes in terms affect both the relationship and the broader portfolio.
Strategic Physics
Strategic participation
Identify relationships where ordinary distribution economics may no longer be enough.
Rights architecture
Model when exclusivity, information rights, pro rata rights, warrants, governance rights, or other participation may be justified.
Milestones & vesting
Track the operating conditions attached to negotiated rights and economics.
Rights register
Maintain every negotiated strategic right, condition, expiration, and obligation.
Information rights
Track required financials, operating reports, cap-table updates, notices, and missing information.
Governance
Manage observer rights, board participation, meetings, materials, conflicts, and obligations.
20 models shown
FAQ
Questions?
How does Commercial Physics measure leverage?
Commercial Physics models the forces that determine bargaining power: supplier dependence, customer demand, replacement difficulty, capital committed, account access, geographic importance, growth contribution, contractual protections, and alternative routes to market. It evaluates those forces together rather than relying on a single metric like revenue or margin.
How does Commercial Physics know what is happening outside our own systems?
Commercial Physics combines distributor data with external supplier, market, category, financing, ownership, growth, and competitive information. The result is a continuously updated view of both sides of the commercial relationship.
How does Commercial Physics determine what we should ask for?
It compares the economics you receive with the value, dependency, capital, growth, and market access created by the relationship. Where those forces are out of balance, Commercial Physics translates the imbalance into specific commercial terms worth evaluating.
Can Commercial Physics measure value that never appears in our P&L?
Yes. Some of the most important value a distributor creates accrues to the supplier rather than the distributor — new accounts, geographic expansion, customer access, faster growth, reduced go-to-market costs, market validation, and distribution infrastructure. Commercial Physics is designed to measure that contribution.
When should a supplier relationship become more than distribution?
When the distributor's contribution becomes strategically important to the supplier, ordinary margin may no longer reflect the economics of the relationship. Commercial Physics identifies those situations and models whether stronger economics, exclusivity, information rights, warrants, pro rata rights, or other forms of participation may be appropriate.
What happens after strategic rights are negotiated?
Commercial Physics becomes the operating system for those rights. It tracks information delivery, milestones, vesting, governance obligations, expirations, exercises, and realization events so strategic value does not disappear inside contracts and spreadsheets.
Does Commercial Physics get smarter over time?
Yes. Every supplier relationship creates additional evidence about how commercial forces translate into outcomes. As more negotiations, supplier performance, portfolio decisions, and realized outcomes enter the system, Commercial Physics can better model what similar relationships should look like.