Manufacturing, Industrial & Distribution · Seller readiness
Selling a Durable Goods Wholesaler & Distributor business
Published · Reviewed by The Diligence Standard Team · Updated
An owner preparing a Durable Goods Wholesaler & Distributor for sale should normalize earnings, organize business-specific evidence, document transferable relationships and surface capital or compliance issues before buyer diligence begins.
How the business works
Customer/supplier concentration, inventory turns, gross margin, rebates, credit terms, warehouse/freight and working capital determine value.
Issues to resolve
- Customer concentration can become buyer leverage if not addressed before market
- Supplier/rebate dependence should be quantified before a buyer reframes value or terms
- Aged inventory needs a credible transfer or mitigation plan
- Owner labor and relationship dependence are not separated clearly from enterprise earnings
- Asset, inventory or compliance records are assembled too late
- The strongest value drivers are asserted but not evidenced
Evidence to request and reconcile
- Customer/product margins
- Inventory aging
- Supplier/rebate agreements
- AR/AP aging
- Warehouse/freight
- Sales pipeline
Decision questions
- Which customers/products create gross profit?
- What inventory is obsolete?
- What rebates/terms are essential?
- What working capital is normal?
- How much relationship ownership sits with seller?