Wholesaler valuations

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July 28, 2021

by a searcher from University of South Carolina in Atlanta, GA, USA

Looking at valuing a wholesaler of industrial products. Revenue below $10 million. I have looked at valuations on the site, but many are much larger businesses. Has anyone have firsthand experience with transaction valuations for a business like this?

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Reply by a searcher
from Elon University in Columbus, OH, USA
Valuing a wholesale distributor is difficult in my opinion because a WD does not have a specific product, patent or differentiated service (especially if they are below 10 Million in revenue). Most likely, the WD is out working hard and providing great service to their customers. Does this "value" lock in customers? Most likely, no.

Does the distributor have exclusive supply arrangements with certain suppliers? Does the WD provide a valued-added service in tandem with strategic supplier relationships? If so, that might change the conversation and lead to higher valuations.

I'd love to hear other' experiences and perspectives.
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