Buying an Electrical Supply House
A Business With No Crew and No Jobsite
An electrical supply house sells out of stock to contractors on trade credit. Nobody is dispatched to a jobsite, nobody holds the license the work is done under, and no hour has to be sold twice. What replaces the crew is working capital: the shelves are the asset and the receivables are the risk. The 2022 Economic Census counts 13,019 establishments across 7,035 firms, so the typical operator runs about two locations, and the trade moved 219 billion dollars through 211,317 people. That ratio is the tell. This is a business that turns inventory and not one that sells hours, and a buyer who reads it as a contractor will underwrite the wrong thing.
What Electrical Supply Houses Trade For
No publisher bands this trade under its own name, and the closest published band is the wholesale and distribution class, which is what a supply house is without being called one. Its sold listings run 2.00x SDE at the lower quartile to 3.44x at the upper, on a 2.68x median, and the median listing sat 199 days. Read that as the shape of the range rather than the price: the same dataset is a main street one, and a size-banded survey of brokered sales puts deals between one and two million dollars nearer 3.1x SDE. What moves a house inside the range is rebate income and how much dead stock survives a real count.
The Size Ceiling Counts Heads, Not Dollars
Every other trade on this site meets a federal size standard written in dollars of receipts. Wholesale trade does not. The standard for this code is 200 employees, counted with affiliates, so a buyer who already owns something is spending part of the ceiling before the first day. Sector 42 adds a second rule that binds if the business bids federal supply work. A wholesaler is deemed small there at 500 or fewer employees, but only where it meets the nonmanufacturer rule. That rule requires it to take ownership of the goods and to supply a small American manufacturer's end item or hold a waiver. A house with federal accounts is read against both.
The Line Card Is the Asset
What a buyer acquires is a set of manufacturer authorizations, and none of them is owned. The line card decides what the house can stock, what it pays for it, and whether a contractor calls at all, and a manufacturer can move a line after a change of ownership. Around it sit the pricing mechanics. A special pricing agreement is a manufacturer-approved discount on one named project, and the house ships at that price and bills the manufacturer for the difference. That claim is a receivable from the manufacturer, it ages like any other, and it is the line most often overstated in a seller's numbers.
What to Verify in Diligence
Authorizations, inventory and receivables carry the value here, and all three can move on a change of ownership. Verify:
- Every manufacturer authorization in writing, and whether it survives a sale
- Inventory aging by line, and the share that has not moved in twelve months
- Rebate income by program for two years, with the volume tiers it was earned on
- Open special pricing claims against manufacturers, and how old the oldest is
- Receivables aging by account, and how much of it sits in the top five customers
- Whether the buying group membership transfers, and on what terms
Financeability Notes
Lenders read a supply house as inventory and receivables and not as a service book, which cuts both ways. Both are collateral, and both are working capital the buyer funds from the first day, so the loan has to cover the purchase and the float underneath it. Expect underwriting to test the inventory valuation hard, because slow stock is worth its liquidation price and not its cost, and to look closely at concentration in the receivables. Model debt service after a market wage for whoever runs the warehouse and the counter, and after the seasonal swing in stock.
Terms in This Industry
Line card
The set of manufacturer lines a supply house is authorized to stock and to sell.
Special pricing agreement
A manufacturer-approved discount on one named project, quoted below the house's normal cost.
Ship-and-debit
The claim a distributor bills back to a manufacturer for the spread on a discounted shipment.
Will-call counter
The trade counter where a contractor collects stock the same day instead of waiting on a delivery.
Buying group rebate
Money a co-operative pays back after the fact, earned on the volume its members buy together.
Dating terms
Extended payment dates a manufacturer grants on a seasonal or project order, ahead of the sale.
Stock rotation right
A manufacturer's capped annual right to return current, saleable stock to it for credit.
What the Data Says
The 2022 Economic Census counts 13,019 electrical apparatus and wiring supplies wholesale establishments across 7,035 firms, with 219.35 billion dollars of sales and 211,317 employees.
The federal size standard for this code is 200 employees and not a receipts figure, and Sector 42's own heading adds that a wholesaler bidding a federal supply acquisition is deemed small at 500 or fewer employees only if it meets the nonmanufacturer rule.
Source: 13 CFR 121.201, SBA table of small business size standards
A distributor that elects the LIFO inventory method may not use any other method in a report to shareholders or for credit purposes, and the election binds every later year unless the Secretary approves a change.
Source: 26 U.S.C. 472(c) and (e), last-in first-out inventories
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
Holding a live deal in this industry? Underwrite it with the comps, cited band, and charge-off rate pre-loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- Border States · Fargo, North Dakota
A 100 percent employee-owned electrical distributor that buys family-owned supply houses and turns their staff into employee-owners, keeping the branches and the people where they are.
- WEDCO · 2026 · A 100 percent employee-owned Nevada electrical distributor founded in 1950, with 73 employee-owners across four branches.
- 1 more confirmed on the firm's profile
- Winsupply · Moraine, Ohio
A co-ownership group standing over hundreds of locally owned wholesale companies, which buys small electrical and plumbing supply houses and usually keeps the selling owner running the branch.
- United Lighting & Supply Co. · 2025 · A wholesale electrical, lighting and appliance distributor established in 1973, with four Florida locations and 34 staff.
Buyers is the shelf these come from, ordered by who closed something most recently.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the manager who runs a fleet or a facility, paid a median of $107,230 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $321,690 off what the business is worth to you.
Transportation, storage, and distribution managers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
The Numbers That Run This Business
- Gross margin by manufacturer line
- Inventory turns
- Rebate income as a share of gross profit
- Collection days on contractor accounts
- Counter and outside sales mix