B2B, Industrial & Distribution · Seller readiness

Selling a Wholesale Distribution business

Published · Reviewed by The Diligence Standard Team · Updated

Owners should prepare customer/supplier margin, inventory aging, working capital and contract/territory evidence before buyers question durability.

How the business works

Customer and supplier concentration, gross-margin durability, inventory turns, working capital and channel rights determine value.

Issues to resolve

  • Inventory is not aged
  • Customer profitability is unavailable
  • Supplier relationships are owner-held
  • Working capital is not normalized
  • Freight/rebate income is poorly reconciled

Evidence to request and reconcile

  • Customer and SKU profitability
  • Supplier spend and agreements
  • Inventory aging
  • AR/AP aging
  • Freight and rebate records
  • Territory/channel agreements

Decision questions

  • How much margin depends on rebates or favorable supplier terms?
  • What inventory is slow or obsolete?
  • Can key supplier agreements transfer?
  • How much working capital must remain in the business?
  • Which customers are low-margin despite high revenue?