Thanks for the nice message! I will try to clarify, but should disclaim: this is a quick post on a subject that has been covered by many thick books, so there will be a gap or three in this info!
Skew is simple ---
1. Shallow skew. A volume sales model. Lots of customers buying lots of items. Though the profit on each item might be small. Target stores. WalMart stores. Grocery stores.
2. Deep skew. Far fewer customers buying one item. The profit on each item might be several hundred or several thousand dollars. Car dealerships. High end electronics. Furniture stores.
Skew & Risk & Cash
There are pluses and minuses to each model, especially when it comes to risk management and the interaction between risk management and cashflow and between cashflow and costs, fixed or otherwise. Generally speaking, you have less cashflow risk with a higher transaction count, because statistically speaking, the odds of suddenly losing a big chunk of your customer base are much smaller.
This means you have a large network of customers and changes to one section of the network are less likely to affect other portions. Think of it like the phone company. Since they have millions of customers, it doesn`t matter if they lose thousands of customers. But they only make a little money from each, so they have huge risk with respect to cost changes that spread across their customer base.
However margin risk is much much higher with shallow skew. Most markets are subject to natural price fluctuation, from direct or indirect market forces. When your margins are smaller [ dollar wise, not percent wise ] you are much more at risk of cost fluctuations reducing your margins. If you make $1-$5 on thousands of items, a 50 cent increase in costs per item, reduces your margins between 10%-50%. These are huge numbers that will be spread across your entire range of transactions. So with risk better distributed, you also have to take into account that the risk can affect more areas of your operation. [ This has its own almost never-ending series of pluses and minuses. And again, here I write a few sentences against the thousands of pages devoted to this in books! ]
On the other hand, if you sell cars, you have another risk. Since you have fewer customers, it is statistically more likely that you will lose customers and each customer`s contribution to your annual profit is much higher. But if you are making several hundred or several thousand dollars per sale, you have much more insulation against nominal cost fluctuations and since your risk is less granular, it has less chance of spreading through all your transactions. Think of this like a super expensive and exclusive phone company with only a few thousand users. In this case, if 100 of 3000 customers go elsewhere, it is indeed a very big deal for cashflow and profits. But on the other hand, it doesn`t matter if costs go up slightly. There are fewer risk units here, so risk is more concentrated. This has pluses and minues.
This post does not address many other important factors, but I am trying to keep this simple!