The short answer
An Australian wholesale or distribution business is priced as a multiple of its maintainable earnings. Oliver Group's indicative ranges for July 2026 are 2.0 to 3.0 times normalised EBITDA under $500,000, rising to 3.5 to 5.0 times between $1 million and $5 million. They are enterprise values that include a normal level of stock.
Where a business sits in its range depends on how secure its supply agreements are, how concentrated its customers and suppliers are, and the working capital it absorbs.
What multiple do wholesale and distribution businesses sell for?
In Oliver Group's indicative ranges for July 2026 the mid point rises with size, from 2.5 times normalised EBITDA under $500,000 to 4.25 times between $1 million and $5 million. These are indicative published ranges with low confidence, not a valuation, and a published range cannot price a particular business.
Normalised EBITDA charges a market wage for the owner's role, so a multiple quoted on earnings before that wage is a different measure and is lower.
| Size band (normalised EBITDA) | Indicative range | Mid point | What it assumes |
|---|---|---|---|
| Under $500k | 2.0 to 3.0 times | 2.5 times | Enterprise value / normalised EBITDA; debt-free, cash-free, going concern |
| $500k to $1m | 2.5 to 4.0 times | 3.25 times | Enterprise value / normalised EBITDA; debt-free, cash-free, going concern |
| $1m to $5m | 3.5 to 5.0 times | 4.25 times | Enterprise value / normalised EBITDA; debt-free, cash-free, going concern |
Do distribution and agency agreements pass to a buyer when the business is sold?
Not automatically. It depends on each agreement's wording and on whether shares or assets are sold. If consent is needed or the agreement ends on a change of control, the goodwill depends on a third party's decision, so a buyer pays less than for the same earnings under an assignable agreement with years to run. A valuer reflects that in the earnings or in the multiple, but not both.
In a share sale the company keeps its rights and obligations; in an asset sale the business entity stays with the seller (Business Queensland, 2022). Each agreement then has to be transferred to the buyer. A buyer reads each agreement for:
- ·Term left and renewal history, including agencies trading after expiry
- ·Exclusivity and territory, and any right to appoint a second distributor
- ·Termination on short notice and minimum purchase targets
- ·Rebates and marketing funds that may not pass on
- ·Assignment and change-of-control clauses
How do customer and supplier concentration change the price?
Both lower the multiple, and a buyer tests them separately. The test is the share of revenue and gross profit from the largest one, three and five customers, and from each supplier or brand.
A dominant customer can reprice at each range review or move to its own label. A dominant supplier can go direct or appoint a second distributor. A business earning most of its gross profit from one principal is a single-agency business in substance, so that agreement decides most of the range.
How is stock treated when a wholesale or distribution business is sold?
Many sale contracts count stock separately, close to settlement. A South Australian legal handbook says a sale contract will usually value stock on a day before settlement, with the buyer paying for it at settlement over and above the price of goodwill and plant. The ranges above are enterprise values, which already include a normal level of stock.
Expired stock that can no longer be sold can be negotiated or removed from the price (Business Queensland, 2022), and a valuer treats superseded models and lapsed-agency stock the same way.
Working capital is stock plus money owed by customers, less money owed to suppliers. A distributor pays for stock before it sells it, so a business that needs more working capital for the same earnings is worth less to a buyer. A buyer sets a normal level from a full year of monthly figures, not one tidied balance date.
How do currency and supply chain risk affect an importer's value?
They lower the price when earnings rest on an exchange rate or a supplier the importer cannot easily replace. A buyer will not pay for a margin that the next currency move can remove, so a valuer tests earnings at more than one exchange rate. A buyer also asks how much purchasing is hedged, how many factories supply the main lines and how much safety stock is held.
The Reserve Bank's daily rates from January 2023 to October 2026 ranged from about US$0.60 (April 2025) to about US$0.73 (May 2026), so a fixed US dollar invoice cost more than 20 per cent more Australian dollars at the low than at the high. In the Australian Bureau of Statistics (ABS) Business Conditions and Sentiments survey for June 2026, which asked about fuel prices and availability, 27 per cent of wholesale trade businesses said they were currently experiencing supply chain disruptions, against 16 per cent of all businesses.
What else does a buyer check in a wholesale or distribution business?
A buyer checks whether the margin will last, whether the premises are secure and who holds the key relationships. ABS figures for the 2024 to 2025 financial year put the margin on goods bought in and resold at 6.5 per cent of sales for automotive diesel and 37.7 per cent for motor vehicle parts and accessories, the lowest and highest of the 13 top wholesale commodities the ABS lists.
- ·Margin: gross profit by customer, supplier and product line over three to five years, and exposure to private label or a principal selling direct
- ·Warehouse: Oliver Group values the business, not the building. A property valuer values any property the owner holds, and the business bears a market rent. For a lease, the term, options and consent to assignment matter
- ·People and licences: who holds the principal and largest-account relationships, and any licence or permit that cannot transfer
- ·Records: aged stock listing, debtor and creditor ageing, and a year of monthly sales and stock
A worked example: from reported earnings to the cash a buyer needs
Illustration only: a hypothetical distributor with sales of $6,000,000, gross profit of $1,800,000 and reported EBITDA of $660,000 after paying the owner $120,000. All figures are assumed. The multiple gives an enterprise value, which includes a normal level of stock and working capital, so neither is added on top.
- ·Normalised EBITDA: $660,000 less $40,000 to lift the related-party warehouse rent from $110,000 to the $150,000 market rent, less $40,000 to lift the owner's pay to a $160,000 market wage, is $580,000
- ·Enterprise value: assume 3.5 times with spread suppliers, but 3.0 times where one principal supplies 70 per cent of gross profit under an agreement with 18 months left and a consent clause (both inside the table's 2.5 to 4.0 times for this size). $580,000 x 3.0 = $1,740,000, which is $290,000 less than at 3.5 times
- ·Stock at valuation: $900,000 at cost, less a $60,000 write-down on slow lines, is $840,000
- ·Debtors less creditors: debtors of $750,000 (1.5 months of sales) less creditors of $525,000 (1.5 months of cost of sales) is $225,000
- ·Cash needed: $1,740,000, of which stock plus debtors less creditors is $840,000 + $225,000 = $1,065,000, leaving $675,000 ($1,740,000 less $1,065,000) for goodwill and plant
When the number has consequences
A formal valuation is worth obtaining when someone else will test the number. In this industry that means a sale or purchase, a partner or shareholder buyout, a restructure or related-party transfer, an estate, or a capital gains tax (CGT) event, including a claim for the small business CGT concessions.
As at November 2026, Australian Taxation Office (ATO) guidance on the maximum net asset value test says the total net value of the CGT assets of the taxpayer, connected entities, affiliates and entities connected with affiliates must not exceed $6 million just before the CGT event. One of its worked examples counts trading stock and trade debtors. Whether a concession is available is a question for the owner's accountant.
Oliver Group prepares independent valuations only. We are not a tax agent and do not give tax, legal or financial advice: your accountant and lawyer apply the valuation in their own fields. Reports follow the guidelines of APES 225 Valuation Services, and a report is not written to a predetermined number.
Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $3 million, a Large Business Valuation is $3,495 + GST for turnover between $3 million and $10 million, and above $10 million the fee is quoted in writing before work starts. A small-business report is delivered in 2 business days and a medium- or large-business report in 3 business days; above $10 million the delivery date is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.