Distribution Exits - The Amazon Shadow and How E-Commerce Disruption Shapes Valuations

Every distribution business owner has felt it—that moment when a longtime customer mentions they found the same product on Amazon for less, with next-day delivery. It’s not just a lost sale. It’s a glimpse into how buyers may scrutinize your business when you’re ready to exit, and why the shadow of e-commerce competition looms larger in distribution valuations than in almost any other sector.

Executive Summary

The distribution industry faces a unique existential question that no amount of strong financials can fully answer: In a world where manufacturers can sell directly to consumers and Amazon can deliver almost anything overnight, why does your business need to exist? How you answer this question—and how convincingly you demonstrate your answer through operational evidence—may affect whether buyers see your distribution company as a thriving enterprise worth pursuing or a declining intermediary worth only its liquidation value.

This article examines the specific factors that cause buyers to discount distribution businesses in today’s M&A environment and provides a diagnostic framework for evaluating your company’s competitive positioning. We’ll look at our observations about valuation dynamics between distribution businesses that have adapted to channel evolution versus those that haven’t, identify characteristics that appear to separate stronger valuations from weaker ones based on our advisory experience, and outline concrete steps for strengthening your transaction positioning. Whether you’re planning an exit in two years or seven, understanding how e-commerce disruption shapes buyer perception may be valuable for your distribution business exit planning.

We want to be clear upfront: defensibility is necessary but not sufficient for premium valuations. Market timing, buyer universe, EBITDA trajectory, and factors beyond your control also significantly affect outcomes. We’ve seen well-positioned distributors receive moderate multiples due to market conditions, and we’ve seen less-differentiated distributors achieve strong outcomes when strategic buyers competed for market access. The frameworks we present here represent our advisory experience, not guaranteed formulas.

Introduction

Distribution businesses occupy a precarious position in today’s economy. They sit between manufacturers seeking efficiency and customers demanding convenience, and both sides increasingly wonder whether they need a middleman at all. This disintermediation risk has altered how many buyers evaluate distribution companies, creating a valuation landscape where two seemingly similar distributors can receive quite different offers.

We’ve observed this dynamic in our advisory work. In one illustrative case, a $12 million revenue electrical components distributor received multiple offers at attractive multiples, while a similar-sized competitor in the same geography struggled to attract serious interest. The difference appeared to stem not primarily from their financials but from how each had positioned itself against e-commerce competition and demonstrated defensibility to prospective buyers. We share this example not as proof of a universal pattern, but as an illustration of how positioning can matter in specific transaction contexts. We’ve also advised well-positioned distributors who received moderate multiples due to market timing or buyer universe constraints, and we’ve seen positioning investments fail to materially improve outcomes when market conditions shifted unfavorably.

The challenge for distribution business owners preparing for exit isn’t just proving that you’re profitable today. It’s helping sophisticated buyers develop conviction that your business model will remain viable in a future where digital channels continue to evolve and expand. This means understanding what buyers typically worry about in distribution acquisitions, what evidence they seek to address those concerns, and how to present your value proposition effectively.

Distribution exits may need a different playbook than exits in other industries. The Amazon shadow touches many conversations, due diligence questions, and valuation discussions. Owners who recognize this reality and prepare accordingly may capture more value than those who dismiss e-commerce disruption as someone else’s problem. But the magnitude of this advantage varies significantly by segment, buyer type, and market conditions, and we cannot quantify it with precision.

Understanding Valuation Dynamics in Distribution M&A

Based on our advisory experience and industry conversations, we’ve observed what appears to be meaningful variation between distribution valuations depending on competitive positioning. We want to be transparent about our evidence basis: we cannot cite comprehensive transaction databases with statistical precision because such databases don’t capture the qualitative positioning factors we’re discussing. Our observations come from approximately 40 distribution transactions we’ve been involved with over 12 years, supplemented by conversations with PE investors and strategic acquirers. This represents a limited sample that may not reflect broader market patterns.

What we’ve observed is that distributors demonstrating clear competitive moats tend to attract more buyer interest and, in some cases, stronger offers than those perceived as vulnerable to e-commerce disruption. But we’ve also seen exceptions: commodity distributors achieving strong outcomes through competitive bidding, and well-positioned distributors receiving moderate offers due to timing or buyer constraints.

The key question driving buyer analysis is sustainability. Buyers want to understand not just what your margins are today, but what they might look like in five years as online competition evolves. They examine customer concentration, product commoditization, and service differentiation with an eye toward future defensibility rather than just historical performance.

What Buyers Typically Worry About

Sophisticated acquirers approach distribution deals with specific concerns that shape their due diligence and valuation thinking. Understanding these concerns allows sellers to address them proactively.

Margin Pressure: Buyers often worry that price transparency enabled by e-commerce could erode distributor margins over time, particularly for commodity products. When customers can compare prices across multiple suppliers instantly, traditional distributor markups become harder to defend, though this pressure varies significantly by segment. Specialty and engineered product distributors with genuine technical expertise typically face less margin pressure than commodity product distributors, based on our observations.

Customer Retention Risk: The relative ease of switching suppliers online means customer relationships may be less sticky than they appear in some segments. Buyers often scrutinize customer tenure, purchase patterns, and the presence of any switching costs that would prevent migration to digital alternatives.

Manufacturer Direct Sales: A significant concern for some buyers is that manufacturers might eventually decide they don’t need distributors for certain product categories. As brands develop direct-to-consumer capabilities and platforms like Amazon offer fulfillment services, some traditional distributor roles become more optional. But this risk varies considerably: in segments where distributors provide aggregation, local service, technical support, or inventory management value that manufacturers can’t efficiently replicate, the motivation for bypass is substantially lower.

Inventory Risk: Distribution businesses carry significant inventory, and buyers consider the risk of that inventory becoming obsolete if market conditions shift or if e-commerce competitors with better demand forecasting gain advantages.

A Framework for Evaluating Positioning

Based on our advisory work, we’ve developed a diagnostic framework that categorizes distribution businesses into three general tiers. We present this as a thinking tool rather than a validated empirical model. Actual valuations depend on many factors beyond positioning, including market timing, buyer mix, EBITDA trajectory, owner concentration, and customer concentration. We cannot quantify specific valuation impacts because outcomes vary too widely.

Higher-Risk Distributors are those offering primarily commodity products with limited service differentiation, competing mainly on price, and serving customers who could relatively easily purchase from Amazon or directly from manufacturers. These businesses tend to face more skeptical buyer interest and more conservative valuation approaches in our experience.

Transitioning Distributors have begun adapting to channel evolution but haven’t fully established their defensive position. They may have some proprietary products or value-added services but still depend significantly on commodity distribution. Buyers typically build risk adjustments into their models for these businesses.

Better-Positioned Distributors have created competitive advantages that e-commerce cannot easily replicate in their specific segments. They tend to attract more interested buyers and stronger offers in our experience, though the magnitude varies considerably. The characteristics that appear to create this positioning deserve detailed examination, with the caveat that their importance varies significantly by distribution segment, company size, and buyer type.

Characteristics That May Support Defensibility

Through our work with distribution exits, we’ve observed seven characteristics that seem to differentiate better-positioned distributors from those facing more competitive pressure. We present these as a diagnostic framework based on consulting patterns, not as empirically validated predictors of specific valuation outcomes. The relative importance of these factors varies substantially across distribution segments: what matters most for a technical/engineered products distributor differs from what matters for a commodity distributor or a specialty chemicals business.

Technical Expertise and Application Support

Distribution businesses that provide genuine technical expertise often appear to attract buyer interest because they offer something that’s difficult to replicate through e-commerce platforms. When your salespeople can help customers select the right component for a specific application, troubleshoot installation problems, and provide ongoing technical support, you’re not just moving products, you’re delivering knowledge.

This expertise tends to be particularly valuable in complex B2B applications where the wrong product selection can cause significant downstream problems. Customers in these situations may pay a premium and remain loyal to distributors who reduce their risk through expert guidance, though we recommend validating this assumption through customer research rather than assuming it applies to your specific situation.

The key is demonstrating that this expertise is institutionalized rather than residing in one or two key individuals. Document your technical knowledge, develop training programs, and create systems that capture and distribute expertise across your organization.

Segment note: Technical expertise creates the strongest defensibility for distributors of engineered, technical, or specification-driven products. For commodity distributors, this factor typically matters less than logistics capabilities or value-added services.

Failure mode to consider: We’ve seen technical expertise investments fail to improve outcomes when the expertise remained concentrated in key personnel who left, when customers didn’t actually value the expertise as much as assumed, or when the buyer had their own technical capabilities and didn’t value yours.

Value-Added Services Integration

Distributors who perform value-added services (kitting, assembly, custom fabrication, private labeling, or specialized packaging) may create switching costs that help protect against e-commerce competition. When you’re integrated into customer operations rather than simply supplying products, you become harder to replace.

The most defensible value-added services are those that would be costly or impractical for customers to perform themselves and that e-commerce competitors cannot easily replicate. Custom machining, specialized testing, or application-specific assembly may create genuine barriers to substitution.

Buyers evaluate value-added services based on their margin contribution and customer stickiness. Services that command premium pricing and create ongoing relationships may receive more credit in valuation discussions, though the magnitude depends on buyer conviction about sustainability.

Segment note: Value-added services become more critical for commodity distributors where product differentiation is limited. For specialty distributors with exclusive access, services may matter less than product availability.

Failure mode to consider: Value-added services investments can fail when services don’t generate sufficient margin premium to justify the investment, when customers outsource services to lower-cost providers, or when the services need ongoing investment that erodes profitability.

Exclusive or Proprietary Product Lines

Access to products that customers cannot easily purchase elsewhere provides some protection against e-commerce disruption. Exclusive distribution agreements, proprietary brands, or custom-manufactured products create differentiation that commodity distribution cannot match.

The strength of these arrangements matters significantly. Buyers examine the terms of exclusivity agreements, the likelihood of renewal, and the true uniqueness of proprietary products. Weak exclusives (those easily terminated or narrowly defined) provide less support than durable, comprehensive arrangements.

But proprietary products and exclusive agreements are more fragile than they might appear. Products you’ve manufactured for a single customer provide less defensibility than broadly-marketed proprietary lines. Customers will invest in switching if economics justify it: we’ve observed relationships survive modest price differences but fail when alternatives offered substantially better economics. Validate that your value proposition justifies maintaining the supplier relationship over alternatives.

Failure mode to consider: Exclusive arrangements can fail when manufacturers terminate agreements, when exclusivity terms prove narrower than assumed, or when customers find substitutes that perform adequately at lower cost.

Critical Supply Chain Position

Some distributors occupy positions in supply chains where their removal would cause significant disruption. This criticality might stem from just-in-time delivery capabilities, local inventory positioning, emergency response capacity, or regulatory compliance expertise.

Buyers often value this criticality because it suggests customers would incur substantial costs to switch suppliers: costs that go beyond simple price comparison. When you’re the reason production lines keep running or construction projects stay on schedule, your value transcends product markup.

Demonstrating criticality needs evidence beyond assertions. Customer testimonials, case studies showing problems solved, and data on delivery performance all help establish your essential role in customer operations.

Failure mode to consider: Criticality can erode when customers build redundancy, when competitors establish similar capabilities, or when supply chain reconfiguration reduces the value of your specific position.

Specialized Logistics Capabilities

Distribution businesses with logistics capabilities that e-commerce cannot easily replicate may create natural defensive moats. This might include hazardous materials handling, temperature-controlled delivery, specialized installation services, or last-mile delivery in challenging environments.

These capabilities often need significant infrastructure investment, regulatory compliance, and specialized training: barriers that discourage new entrants and provide some protection against digital disruption. Buyers may recognize that these capabilities cannot be quickly replicated.

The key is making sure these logistics capabilities are genuinely differentiated rather than merely adequate. Standard warehousing and delivery add little defensibility, while truly specialized capabilities may support stronger positioning.

Segment note: Logistics capabilities matter enormously for perishable goods distributors, heavy materials distributors, and emergency response products where rapid local availability is critical. For lightweight, non-perishable products with flexible delivery windows, logistics differentiation provides less protection.

Deep Customer Integration

Distributors who have integrated their systems with customer operations (through VMI programs, embedded inventory management, EDI connections, or punch-out catalogs) may create switching costs that help protect against competitive pressure. When changing distributors means reconfiguring systems and retraining staff, customers may think twice about switching for marginal price savings.

This integration also generates data that can strengthen customer relationships. Understanding customer purchase patterns, anticipating needs, and proactively managing inventory creates value that transactional suppliers often cannot match.

Buyers evaluate integration depth and breadth. Integration with a handful of customers provides some protection, but enterprise-wide systems integration across your customer base demonstrates more scalable defensibility.

Important caveat: System integration increases customer stickiness by raising switching costs, but the protection isn’t absolute and varies dramatically by situation. How much protection depends on the customer’s alternative options, your price positioning, and how critical your products are to their operations. Strong system integration might defend against modest price differences but may not overcome larger gaps or fundamental shifts in how customers source products. We recommend validating integration’s actual protective value through customer conversations rather than assuming it creates durable barriers.

Failure mode to consider: Integration investments can fail when customers change ERP systems, when the integration becomes a maintenance burden rather than a value-add, or when customers consolidate suppliers in ways that make your integration less relevant.

Market Position and Geographic Advantage

In some markets, geographic positioning or market density creates defensibility that e-commerce may struggle to overcome. Rural markets, rapid-response demands, or applications requiring immediate local availability can provide some protection against digital competition.

Geographic advantage varies significantly by product category. Perishable goods, heavy materials (cement, aggregates, steel), and emergency response products benefit greatly from local positioning. Commodity products competing primarily on price gain less protection from geography alone.

This geographic advantage is strongest when combined with other defensive characteristics. A distributor with technical expertise, value-added services, and superior local positioning presents a more compelling value proposition.

Segment note: Geographic advantage remains strongest for distributors of heavy building materials in regional markets, perishable goods needing rapid delivery, and products where same-day emergency response is critical. For lightweight commodity products, e-commerce logistics improvements have reduced this advantage in most metro areas.

How Different Buyer Types Evaluate These Factors

A critical consideration often overlooked: different buyer types weight defensibility factors very differently, and your likely buyer universe significantly affects which positioning investments matter.

Strategic acquirers may not prioritize standalone defensibility if they can fold your customer base into their existing platform. They might value your customer relationships, geographic coverage, or product lines more than your individual competitive moats. For strategic buyers, your value might come primarily from synergies rather than defensibility. If strategic buyers are your most likely acquirers, focusing exclusively on defensibility may be the wrong priority.

Private equity firms care enormously about standalone defensibility because they’re betting on the business as an investment that must perform on its own merit. PE buyers stress-test extensively and build detailed risk adjustments into their models. They’re typically your most skeptical audience on defensibility questions.

Competitor acquirers may weight your market position and cost synergies more heavily than your standalone defensive characteristics. They might see value in eliminating a competitor regardless of your individual positioning.

Management rollup platforms have yet another perspective, often looking at how you’d fit into a larger aggregation strategy.

Your transaction positioning should address the concerns most relevant to your likely buyer universe. If you’re likely to attract strategic buyers, focus on demonstrating profitable growth and market position. If you’re targeting financial buyers, defensibility becomes more central to the conversation.

Quantifying the E-Commerce Impact

When preparing for a distribution exit, you need specific data demonstrating how your business has performed against e-commerce competition. Buyers will probe this question, and vague assurances provide limited comfort.

Customer Retention Metrics

Track customer retention rates with granular detail, including tenure analysis showing how long customers have remained active and whether retention has changed as e-commerce options expanded. Segment this analysis by customer type, product category, and service level to identify where your positioning is strongest.

Compare your retention rates to industry benchmarks where available and be prepared to explain any erosion. Buyers expect some impact from e-commerce competition: acknowledging this reality while demonstrating resilience builds credibility.

Competitive Win/Loss Analysis

Document situations where you’ve won business against e-commerce competition and analyze why. These wins provide evidence of differentiation and help buyers understand what separates your offering. Similarly, analyze losses to demonstrate awareness of competitive dynamics and corrective actions taken.

Margin Trend Analysis

Show margin trends over the past 5-7 years, particularly examining periods when e-commerce competition intensified in your segment and during the pandemic acceleration period. Buyers will scrutinize whether your margins have compressed and what you’ve done to maintain profitability. Compare to your specific competitive category, not blanket industry averages. Evidence of stable or improving margins against a backdrop of increasing competition provides support for stronger positioning.

Customer Survey Data

Formal customer surveys asking about satisfaction, likelihood to switch, and the specific value your company provides can generate evidence that supports transaction positioning. Buyers often give weight to customer perspectives, and documented feedback can strengthen claims of defensibility.

ROI consideration: A professional customer survey typically costs $8,000-$20,000 depending on scope and methodology, and may support your positioning if results are strong (high satisfaction, high switching cost perception, clear articulation of value received). But weak results could undermine positioning. We recommend conducting informal pilot conversations with key customers before investing in comprehensive research to gauge likely results. If pilot conversations reveal concerns about your value proposition, that’s valuable information, but you may want to address those concerns before commissioning formal research.

The Limits of Defensibility

Before discussing positioning strategies, we want to be clear about what defensibility can and cannot accomplish.

Defensibility Is Necessary but Not Sufficient

Building defensive characteristics may improve your positioning but doesn’t guarantee premium outcomes. Multiple other factors significantly affect final valuations:

• Market timing: Economic downturns typically compress multiples even for strong companies
• EBITDA trajectory: Stagnant or declining EBITDA receives lower multiples regardless of defensive moats
• Owner concentration: Owner-dependent businesses get discounted even if otherwise defensible
• Customer concentration: If your moat depends on relationships with a small number of large customers, it’s fragile
• Buyer universe: Not all potential buyers value the same factors
• Deal competition: Multiple interested buyers can drive valuations above what positioning alone would support

We’ve advised well-positioned distributors who received moderate multiples due to market timing or a limited pool of interested buyers. We’ve also seen less-differentiated distributors achieve strong outcomes when strategic buyers competed for market access. Defensibility may support valuation but doesn’t determine it alone.

Some Threats Are Structural, Not Competitive

E-commerce competition threatens different distribution segments differently. Before investing in defensibility, assess whether your segment faces market-level structural disruption or company-level competitive pressure:

• Structural disruption occurs when manufacturers decide to sell direct across an entire category, when Amazon achieves logistics dominance in your product space, or when subscription/SaaS models replace transactional distribution. In these cases, individual company defensibility has limited impact.
• Competitive pressure occurs when e-commerce creates alternatives to your specific offering, but the underlying distribution model remains viable. Here, defensibility strategies may meaningfully improve outcomes.

Defensibility strategies work best when the threat is competitive rather than structural. If your segment faces fundamental disruption, the best strategy might be accelerating your exit timeline rather than investing in moats that won’t change the macro dynamic.

How to assess: Consider whether leading competitors in your segment are successfully defending against e-commerce, whether manufacturers in your categories have announced or implemented direct-to-customer initiatives, and whether customer behavior suggests temporary resistance or permanent shift to digital channels. If structural disruption appears underway, consult with advisors about timeline acceleration rather than defensibility investment.

Transaction Positioning Strategies

Presenting your distribution business effectively needs strategic framing that addresses buyer concerns while highlighting your competitive characteristics. Several approaches can strengthen your positioning, keeping in mind that positioning works at the margin and cannot overcome fundamental weaknesses in the business.

Lead with Your Competitive Position

Structure your presentation around the question buyers most want answered: Why should we believe this business will continue to perform as e-commerce evolves? Open with your defensive characteristics rather than burying them. Make it easy for buyers to see how you differ from more vulnerable distributors.

Provide Evidence, Not Assertions

Every claim about competitive positioning should be supported by data, customer testimonials, or documented examples. Buyers have heard countless distribution owners claim they provide superior service: show them through metrics and customer voices rather than telling them through assertions.

Acknowledge the Competitive Landscape

Dismissing e-commerce competition undermines credibility. Buyers know the pressure is real, and sellers who pretend otherwise signal either naivety or lack of self-awareness. Acknowledge the competitive environment while demonstrating your response and your results.

Demonstrate Continued Investment

Show that you’re continuing to invest in capabilities that strengthen your position. Buyers worry about acquiring businesses that have underinvested while coasting on legacy customer relationships. Evidence of ongoing capability development supports forward-looking valuations.

Frame the Opportunity

While addressing risks, also help buyers see growth potential. Distribution consolidation creates opportunities for strategic acquirers to build scale advantages. Geographic expansion, product line extensions, and customer cross-selling all represent growth opportunities that sophisticated buyers can capture.

Realistic Investment Considerations

If you’re considering investing in defensibility before exit, understand the realistic costs, timelines, and expected returns, and the significant uncertainty involved.

Timeline Realities

Building meaningful defensibility takes time, often longer than owners anticipate:

• Technical expertise development: Typically 24-48 months to build credible, institutionalized capability, depending on starting point and talent availability. Shorter timelines are possible with experienced hires but rare.
• Customer integration programs: 6-18 months per major customer, depending on complexity; building integration across your customer base typically takes years.
• Value-added services infrastructure: 18-36 months from concept to reliable, profitable operations, including equipment procurement, facility modifications, training, and operational refinement.
• Cultural change: 18-36 months to shift organizational posture toward new service models and confirm changes are embedded.

If you’re planning an exit within 12 months, focus on documenting and packaging existing defensibility rather than building new capabilities. If you have 2-3 years, you may be able to develop new services or integration programs that affect positioning, but results are uncertain. Multi-year investments in technical expertise development pay off only if completed and proven before sale.

Investment Costs

Building defensive capabilities needs meaningful investment. The ranges below are approximate and vary significantly by geography, scope, and starting point:

• Technical expertise: May add $80,000-$200,000+ in annual specialized personnel costs depending on market rates and expertise needed, plus ongoing training investment
• Customer integration: Systems investment of $100,000-$400,000+ depending on complexity, plus ongoing maintenance costs and internal resource allocation
• Value-added services: Equipment investment ranging from $150,000 for basic capabilities to $1,000,000+ for sophisticated operations, plus facility modifications, training, and working capital
• Working capital impact: Kitting, assembly, and VMI programs often need additional inventory investment of 15-30% and extended receivables, representing ongoing capital allocation

These estimates represent direct costs. Indirect costs (management attention, opportunity cost of capital, operational disruption during implementation) can be substantial and are difficult to quantify in advance.

Comparing Alternatives

The decision to invest in defensibility before exit depends on your timeline, current position, and the return opportunity compared to alternatives. We cannot predict which approach will generate better outcomes in your specific situation, but we can outline the tradeoffs:

Option 1: Exit now at current positioning

• Avoids multi-year investment and associated execution risk
• Captures current market conditions (which may deteriorate)
• Accepts current positioning without attempting improvement
• May be optimal if segment faces structural disruption or if market timing is favorable

Option 2: Minimal investment in documentation and presentation

• Documents existing defensibility without building new capabilities
• Lower cost ($25,000-$75,000 for professional preparation)
• Shorter timeline (3-6 months)
• Appropriate for businesses with existing defensibility that’s under-communicated

Option 3: Focus on EBITDA improvement

• Operational efficiency and margin optimization may deliver more certain returns than defensibility investment
• Many buyers value current earnings trajectory more than defensive positioning
• If you can improve EBITDA by 15-20% through operational focus, that may deliver better risk-adjusted returns than defensibility investment
• Calculate your specific scenario before committing to defensibility investments

Option 4: Full defensibility investment

• Multi-year program to strengthen competitive position
• Higher cost and execution risk
• Uncertain return on investment
• May be appropriate if you have 3-5 year timeline, strong confidence in segment viability, and specific defensibility gaps you can address

We recommend working through these alternatives with advisors who understand your specific situation rather than defaulting to defensibility investment.

Actionable Takeaways

Distribution owners preparing for exit should consider these concrete steps to strengthen transaction positioning:

Assess your position honestly against the characteristics we’ve identified, recognizing that factor importance varies by your specific segment, size, and likely buyer universe. Be realistic about where you’re strong and where you’re vulnerable. Consider engaging an objective third party for this assessment.

Document your evidence comprehensively. Customer testimonials, service performance metrics, retention data, and competitive win analysis all provide concrete support for your positioning claims.

Evaluate segment-specific dynamics before investing. Technical expertise matters more for engineered products; logistics capabilities matter more for perishables; geographic advantage matters more for heavy materials. Focus investment where it addresses your specific segment’s buyer concerns, or conclude that your segment faces structural disruption that defensibility cannot address.

Validate assumptions through customer research before major investments. Ask customers about switching costs, value perception, and alternatives they’d consider. The answers will tell you whether your planned investments will actually strengthen your position. If customers don’t perceive the value you assume, investment in that area may not improve outcomes.

Consider timeline and alternatives realistically. If you have 12-18 months, focus on documentation and presentation rather than capability building. If you have 3-5 years, compare defensibility investment against EBITDA improvement and earlier exit as alternatives.

Understand your likely buyer universe and tailor positioning accordingly. Strategic buyers, PE firms, and competitor acquirers evaluate different factors differently.

Engage advisors who understand distribution and can help position your business effectively for your specific segment and situation. Look for advisors with recent transaction experience in your segment who can provide realistic assessments rather than optimistic projections.

Conclusion

The Amazon shadow affects many distribution exits, but it doesn’t determine your outcome. Buyers differentiate between distributors facing significant competitive pressure and those with more defensible market positions. Understanding this distinction, and demonstrating where you stand with concrete evidence, may be valuable for effective transaction positioning.

The distribution businesses that appear to attract stronger buyer interest have typically done the work to create genuine competitive differentiation appropriate to their segments. They’ve invested in technical expertise, value-added services, proprietary products, or customer integration where those investments made sense for their specific situations. They’ve documented their advantages and prepared evidence supporting their sustainability claims.

But we want to be realistic: defensibility may support valuation but doesn’t guarantee premium outcomes. Market conditions, buyer appetite, EBITDA trajectory, and factors outside your control all matter significantly. Some distribution segments face structural disruption where individual company positioning has limited impact. And we’ve seen positioning investments fail to generate returns when execution faltered, when assumptions proved wrong, or when market conditions shifted.

For distribution owners planning exits in the coming years, the path forward needs honest assessment of your competitive position, realistic evaluation of investment alternatives, and careful transaction positioning that addresses buyer concerns relevant to your specific situation. The e-commerce competitive landscape is real, but so is the opportunity for well-positioned distributors to present compelling acquisition opportunities.

We work with distribution business owners to evaluate their competitive position, assess segment-specific dynamics, and execute transactions that reflect their value. If you’re wondering how channel evolution affects your exit prospects, that conversation starts with understanding exactly where you stand in your specific market and what realistic options exist for your situation.