Sell a Wholesale Distribution Business
Before selling a distribution business, separate the strength of its customer relationships from the cash tied up in stock. Buyers will examine both.
Put inventory quality beside inventory value
A warehouse total does not explain whether products will sell. Prepare an inventory ageing report and identify obsolete, damaged, slow, or customer-specific stock.
Explain how you value inventory and record write-downs. Keep consigned stock, customer-owned items, and stock held elsewhere distinct from inventory the business actually owns.
Show what suppliers make possible
List the terms that matter: territories, rebates, minimum purchases, payment periods, and any exclusive arrangements. Distinguish written agreements from informal understandings.
Ask advisers which agreements need consent or a new application when ownership changes. A long relationship is useful context, but it is not proof that the buyer will inherit the same terms.
Make working capital part of the conversation
Strong sales can still require substantial cash for stock and receivables. Share the normal purchasing cycle, collection pattern, and seasonal peaks.
Agree how inventory and working capital will be handled in the offer. Otherwise, an attractive headline price can conceal a different expectation about what the seller must leave in the business.
Explain customer concentration and margins
Group sales by customer and product family, with margins where records allow. Show returns, credits, freight costs, and unusual orders clearly.
If one customer drives a large share of earnings, explain how the account is managed and what supports retention. Do not assume a buyer will treat that revenue as guaranteed.
Prepare a sale without disrupting orders
Keep purchasing, fulfilment, and credit control consistent during the process. A sudden stock reduction may improve cash briefly while weakening the business the buyer is evaluating.
Start with financial records, inventory reports, supplier terms, and a summary of your daily responsibilities. Share sensitive details only through an agreed review process.