Wholesale and trading businesses for sale

A trading business does not make anything. It sits between suppliers and customers, and its value lies in those two sets of relationships: the right to sell certain products and a network of customers or dealers who buy them. The first question is always what happens to the supplier agreements when the business changes hands.

Many distribution and agency agreements are personal or contain a change of control clause that lets the supplier terminate. Others can be terminated at short notice regardless of who owns the business. Ask to see the agreements, and ask whether the key suppliers have been informed and have agreed to a new owner. An exclusive agreement for Denmark or the Nordics is worth paying for — but only if it survives the deal.

Next, look at margins. Trading usually carries lower gross margins than manufacturing, and small changes in purchase prices, exchange rates or freight can wipe out much of the profit. Ask how supplier price increases are passed on to customers.

Trading businesses with employees are usually priced on EBITDA, with the owner’s work deducted at a market salary. Sitavo’s indicative range is 2.5–4.5 times EBITDA, cross-checked against 0.2–0.6 times annual revenue. Exclusive supplier agreements, own brands and a broad customer base push the price up; agreements that can be ended at short notice and a few large customers pull it down. Stock is often settled separately. These are general market ranges, not a valuation — use Sitavo’s price estimate for a specific business.

• Gross margin by supplier and product group.
• The largest suppliers’ share of purchasing and the largest customers’ share of sales.
• Stock turnover and the share of slow-moving or obsolete goods.
• Receivables: payment terms, bad debts and any credit insurance.
• Working capital: how much is tied up in stock and receivables.

• Supplier and agency agreements: exclusivity, territory, term, notice and change of control clauses.
• Written confirmation from key suppliers that the agreement will continue.
• Stock list with age, purchase price and obsolete items.
• Receivables ledger with overdue items and historical bad debts.
• Customer and dealer agreements, including discounts and rebates.
• Lease for warehouse and office: term, notice and whether it can be assigned.
• Web shop, B2B portal, product data and customer database.

Sellers can place agreements and accounts in a data room behind an NDA. See also the pre-purchase checklist.

In a share purchase, supplier agreements, customer agreements and liabilities stay with the company, although change of control clauses may still let a supplier terminate. In an asset purchase, the agreements must be assigned or signed again, which needs the suppliers’ consent. Agree how stock is counted and priced on the handover date, and who takes over the receivables. Employees transfer on their existing terms under Danish law, and it is often the sales staff and buyers who know the customers and suppliers, so make sure they stay. Foreign buyers should expect Danish-law contracts, Danish VAT and a local adviser for the agreement. Read more in the handover guide.

Acquisitions are usually financed with equity, bank debt and possibly vendor financing. Remember that stock and receivables need financing too, and banks often treat them as security. Sitavo does not provide financing. Messaging sellers and making offers on Sitavo is free, and the deal workflow keeps the purchase agreement and handover in one place. The purchase price is paid directly from buyer to seller — Sitavo never holds the money. Read how payment works, and see manufacturing businesses for sale if you would rather own the production.