Does anyone have experience with outsourced distribution channels?
April 10, 2025
by a searcher in Illinois, USA
I'm exploring a deal for a industrial supply/MRO type distributor, but the company does not own the main distribution facility where it stores inventory, and does not have any lease or contract with the warehouse itself. The company does pay a monthly fee/rate for storing/shipping etc, but its negotiated ad hoc - no regular fee schedule.
Has anyone come across these type of deals? Is this type of 'gentleman's agreement' arrangement feasible for an SBA loan?
from The University of Arizona in Gilbert, AZ, USA
This is a very common business type called a value added distribution. You are working with a 3rd party logistics company that handles of the distribution. To be clear you are buying a sales organization. It is something you can get an sba loan for and personally have looked at several of these businesses myself and even had one under LOI that I walked away from. That deal I left because of key man risk and would evaluate heavily if you can replace the seller.
I worked for one of the largest publicly traded value added distributor and know this model and happy to connect with you if you want to PM me or my email is redacted
from Stanford University in Healdsburg, CA 95448, USA