THE SHORT ANSWER
Reconcile supported annual earnings, necessary owner replacement, usable inventory and supplier/customer terms before selecting sold comparisons. BizBuySell’s broad national 2021–2025 wholesale/distribution sold sample reports a 2.68x median owner-discretionary earnings multiple. It is not a product-specific managed-company EBITDA range, current appraisal or rule to add all inventory to every earnings-based price.
Use the broad historical sold earnings table
BizBuySell covers wholesale and distribution across product categories.
(BizBuySell: wholesale and distribution sold benchmarks)| 2021–2025 reported sold owner-earnings statistic | Multiple |
|---|---|
| Lower quartile | 2.00x |
| Median | 2.68x |
| Mean | 2.89x |
| Upper quartile | 3.44x |
Seek sold operations with comparable product/service mix, owner work, territory, financial definitions and included assets. An exclusivity label, ERP installation or account count does not automatically place a company in the upper quartile.
Define annual earnings and account costs
Reconcile actual orders, shipment, returns, credits and collection to annual accounts. Explain purchasing/product cost, freight, warehouse, delivery, account service, credit losses and shared overhead on a consistent basis. Review supplier rebates and terms using actual earned conditions and records. Gross margin is separate from supported annual operating earnings.
SEC adjusted-measure guidance is an issuer presentation reference.
(SEC: non-GAAP financial measure interpretations)Have the accountant define starting period/measure, deducted expense and future purpose. Draws, debt principal, inventory purchases and every warehouse renovation are not automatic earnings adjustments. Include recurring purchasing, pricing, account, warehouse and collection replacement using the earnings-basis guide. A size threshold alone does not select SDE or EBITDA.
Review usable stock and customer/supplier economics
Reconcile owned, consigned, customer-held, damaged, obsolete, returned and committed stock through actual counts and ledger definitions. If calculating turns, state the period, cost numerator and average stock basis; sales divided by ending stock is a different measure. There is no universal healthy turn number for every product mix.
Read actual exclusivity, territory, rebate, pricing, minimum purchase, assignment, ownership-change and termination conditions using the consent register. Review actual customer exposure, credit and collection behavior rather than a standard account ceiling. A contract or warehouse balance does not prove permitted buyer rights or recurring contribution.
Compare price and delivery on an explicit basis
SBA sale guidance addresses valuation approaches and agreement assets/liabilities.
(SBA: closing or selling a business)State whether the proposed price includes inventory, operating equipment, receivables, premises/property or other assets. Do not add all stock at ledger cost again without checking the comparison. Keep debt/payoff, cash and the actual lender’s proposed facilities separate.
Define included/excluded inventory, receivables, payables, deposits, open orders, returns and claims using the distribution sale-terms guide. Review recurring payments and collection timing alongside necessary investment and financing. Use the seller preparation guide for evidence. The scenario tool calculates assumptions and does not certify a value or verify buyer pricing.
Owner questions
Is the 2.68x median distribution EBITDA?
It is historical owner-discretionary earnings in a broad reported sold wholesale/distribution category.
Should all inventory be added to an earnings price?
Define what the comparison and proposed price already include first.
Does one inventory-turn threshold fit every distributor?
Define actual cost/stock basis, period, product mix and usable condition before comparing.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- BizBuySell: wholesale and distribution sold benchmarks
Broad national 2021–2025 reported sold wholesale/distribution category. Primary sold owner-discretionary earnings table reproduced. Not a specific product-category or managed-platform EBITDA range, current appraisal, inventory add-on rule or guaranteed territory/customer premium. Asking/revenue and other financial/macro summaries separate.
- SEC: non-GAAP financial measure interpretations
Staff interpretations last updated December 2022: recurring operating costs and distinguishing EBITDA from adjusted measures. SEC reporting context, not a universal private-sale rule or automatic acceptance of add-backs.
- SBA: closing or selling a business
Valuation approaches, sale agreements, assets and ownership transfer.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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