Why Revenue Alone Is a Misleading Metric for Distribution Companies

McKesson, one of the highest-revenue companies in the US at over $300 billion annually, operates on a net margin well under 1%, exposing how revenue figures can distort perceptions of business size and success. As a pharmaceutical distributor, most of McKesson's revenue is pass-through cost — money that flows straight to drug manufacturers — leaving the company with only a thin spread as actual earnings. This contrasts sharply with asset-light software firms, where revenue closely reflects value captured, meaning cross-industry revenue comparisons can systematically overrank distributors and wholesalers. Analysts and data architects are urged to store additional fields such as gross profit, net income, and a revenue model category to enable more meaningful size and performance comparisons. Treating revenue as a universal success metric, the argument goes, is less an analytical choice and more an accident of which column was most convenient to sort by.