What kinds of distribution businesses come up for sale?

Distribution businesses all move goods from a maker to a customer, but they earn money in different ways and carry different risks. Knowing which type you are looking at tells you what to examine first. This page sorts the types you will usually meet in listings and names what each one rests on from day to day.

Stocking wholesalers

A stocking wholesaler buys in volume, holds inventory and sells to retailers or trades. Its strength is availability and service. Look at the supplier lines it carries, how fast stock turns, and whether customers buy because of the range or only the lowest cost. Slow inventory is the usual trouble spot.

Exclusive and master distributors

These businesses hold the right to sell a brand or product in an area. The agreement with the supplier is the asset. Ask how long it runs, whether it passes to a new owner, and whether the supplier could sell direct. Ask what remains if the supplier agreement does not pass to you.

Route, import and logistics models

A route-based business delivers on set schedules, so trucks, drivers and customer stops matter. An import agent depends on overseas suppliers and the paperwork between them. A fulfilment or third-party logistics operator depends on its warehouse lease, systems and a few client contracts. Each is a different business to run.

• Stocking wholesaler: supplier lines and inventory.
• Exclusive distributor: the supply agreement.
• Route business: trucks, drivers and customer stops.
• Fulfilment operator: lease, systems and client contracts.

Once you know the type, what to check before buying a wholesale distribution business is a sensible next read.