What Is My Wholesale Distribution Business Worth?

Wholesale distributors occupy a critical position in supply chains — connecting manufacturers to retailers, restaurants, contractors, and other end users. The value of a distribution business depends heavily on supplier relationships, territory rights, and customer diversification.

Typical Valuation Ranges

Most wholesale and distribution businesses sell for 2.5x to 4x SDE or 3x to 5x EBITDA for larger operations.

Factors that push toward the higher end: Exclusive supplier or territory agreements, diversified customer base, proprietary brands or private label products, value-added services (kitting, customization, just-in-time delivery), revenue above $5M with consistent growth, modern warehouse and logistics operations.

Factors that push toward the lower end: No exclusive agreements (commodity distribution), customer concentration (one buyer is 25%+ of revenue), thin margins (below 20% gross), owner manages all supplier and customer relationships, aging warehouse and delivery fleet.

Key Value Drivers

Supplier exclusivity — exclusive distribution rights for a brand or territory are extremely valuable. They create a defensible competitive position that's difficult to replicate.

Customer diversification — distribution businesses face concentration risk on both ends (suppliers and customers). Diversification on both sides reduces risk.

Margin profile — value-added distributors who customize, kit, or provide technical support command higher margins (30%+) than commodity pass-through distributors (15–20%).

Inventory management — efficient inventory turns (6–12x annually) demonstrate operational competence and reduce working capital risk.

How to Increase Your Value

1. Secure exclusive agreements. Negotiate exclusivity with key suppliers for your territory.
2. Diversify customers. Reduce concentration by growing your customer base across industries and geographies.
3. Add value. Kitting, customization, technical support, and just-in-time delivery justify higher margins.
4. Build private label. Proprietary or private label products improve margins and create brand value.
5. Optimize inventory. Modern warehouse management, demand forecasting, and efficient logistics improve turns and reduce waste.

Browse the valuation multiples guide for industry data, or schedule a free call for a confidential valuation.