Distribution
Owner dependence in a Texas distribution business
Who this is for
Texas distributors and wholesalers doing $3M to $20M in revenue — industrial, MRO, building products, and specialty lines. Profitable, plateaued, and running through one person.
Rusk & Co. does not buy businesses, take equity, or broker them.
What owner dependence looks like here
Six things a distributor recognises immediately.
Every price exception is yours
The price file covers list. The override for the customer who has always had one, the volume break, the freight allowance — each of those comes to you, and none of them is a written rule.
The vendor relationships are personal
Rebate programs, allocation when supply is short, an extra thirty days in a tight quarter. Those come to you because of who you are, not because of what the company buys.
You are the escalation path for every large account
A late shipment on a top-ten account becomes your phone call. The account manager coordinates; the relationship itself is still yours, and everyone on both sides knows it.
Buying waits on your read of the market
Reorder points and min/max exist in the system and get overridden by judgment nobody else has. Which is why the same overstock and the same stockouts repeat.
Working capital is balanced in your head
Turns, terms, and collections get traded off against each other at the end of the month by instinct, rather than by a policy someone else could run.
Dead stock is a story only you can tell
You know why every slow bin was bought and what it might still be worth. That knowledge is exactly why nobody else is able to clear it.
The numbers already on your desk
In a distributor, dependence is visible in the working capital first.
None of these are new metrics. They are the ones a distributor already runs every week — read for a different question.
- Inventory turns
- Cost of goods against average inventory, by category and by vendor. Turns that vary wildly between categories are a buying policy living in one head.
- GMROI
- Gross margin return on inventory investment, by line. It shows which vendor relationship is actually earning the working capital it consumes.
- Line-item fill rate
- Lines shipped complete on the first pass. When it depends on who took the order, service is a person rather than a process.
- Days sales outstanding
- Collections against stated terms, by customer. Owner-approved exceptions on terms show up here before they show up anywhere else.
- Price exception rate
- The share of order lines shipped off the price file, and who approved them. It is the cleanest single measure of decision routing in a distributor.
- Dead and slow-moving stock
- Inventory with no movement in two quarters, by buyer. Nobody clears it while the reasoning for buying it sits in one person’s memory.
What changes
Pricing, buying, and the accounts stop routing through one desk.
None of it is dramatic. It is a pricing policy with a real exception limit, buying rules a planner can run, and named owners on the accounts and the vendors.
Value Builder System research puts businesses that can run without the owner at roughly 4.49x pre-tax profit versus 2.93x for owner-dependent ones. In a working-capital-heavy business, the same work usually releases cash long before it changes the multiple.
- A written pricing policy — list, contract, volume break — with a documented exception authority and a limit.
- Vendor relationships held by the company: a named relationship owner per vendor, with rebate programs and allocation terms documented rather than remembered.
- A named account owner on each of the top twenty accounts who is not you, on the escalation path and in the review.
- Buying rules an inventory planner can run: min/max on a review cadence, reorder points tied to lead time and variability, and a stated policy for slow-moving stock.
- A working capital policy that states target turns, target terms, and how far each may move without you.
- A weekly report that reads turns, GMROI, fill rate, days sales outstanding, and exception volume without you assembling it.
Rusk & Co. is a Houston-based firm working as an embedded operating partner with established Texas businesses — $3M to $20M in revenue, across mechanical contracting, manufacturing, distribution, trucking, and professional services. We don’t buy businesses and we aren’t brokers.
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Tell Rusk & Co. which accounts still call you first.
Houston and across Texas. Distributors and wholesalers doing $3M to $20M in revenue.