Why commercial execution will determine the next wave of winners
Distributors are optimistic about the next few years. That optimism may be justified. It may also create a false sense of security.
Our 2026 Wholesale & Distribution Executive Survey found that 76% of respondents expect their growth outlook to improve over the next two to three years, while 69% expect profitability to improve. Current performance is far less convincing: only 31% are above revenue plan, and 26% are above gross-margin plan.
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Our view is that the gap matters. A stronger market can lift revenue, but it can also mask weak pricing, poor customer prioritization, excessive cost-to-serve, and undisciplined investment. Companies can grow and still leave substantial value on the table.
That is why we believe the next market cycle will be more demanding than the headline optimism suggests. The distributors that outperform will be those that use a better market as an opportunity to sharpen commercial discipline, not as a substitute for it.
The strongest distributors will be more explicit about where to grow, which customers deserve investment, and where price should be captured. They will use customer economics to guide decisions and will prioritize digital and AI where they offer measurable value. Just as importantly, they will be willing to say no to unattractive volume, low-value complexity, and investments that do not address the company’s most important economic opportunities.
Profitable growth will increasingly be a management choice, not simply the result of a stronger market.
Start by deciding what kind of growth you actually want
One of the clearest findings from the survey is that there is no single growth playbook. Among distributors below $500 million in revenue, 58% identify customer acquisition as a commercial priority, compared with just 27% of larger companies. Larger companies have a more balanced agenda that includes acquisition and deeper penetration of existing accounts.
The available sources of growth change as businesses become larger and their customer bases mature. A distributor with substantial whitespace in its market may create considerable value through customer acquisition. A company with an established position may have a much larger opportunity within the accounts it already serves. Others may find attractive growth in adjacent verticals, product categories, geographies, or channels.
To shape your growth strategy, first identify where attractive growth exists. For each account, assess potential value, current penetration, remaining whitespace, margins, and cost-to-serve. Once those economics are visible, the choices become clearer. Some customers deserve more investment. Some warrant a focused effort to increase share of wallet. Some should be protected. Others may need a different service model. There will also be instances where pursuing additional volume simply does not create enough economic value for customers.
Those choices should shape sales coverage, account planning, and channel investment. Historical revenue still matters, but it should not determine how resources are allocated on its own.
The first rule of profitable growth is to be explicit about the growth you want and the economics you expect it to create.
Four priorities for driving profitable growth
The survey points to four areas where distributors have a meaningful opportunity to improve performance. They form a connected commercial system: choosing where to grow, capturing the right price, understanding the economics of that growth, and using technology to improve the decisions that matter.
Focus growth on the right customers
Sales capacity is one of the most expensive resources a distributor has, yet it is often allocated with surprisingly little reference to future potential. Territories reflect history. Large accounts receive attention because they are large. Experienced sellers retain relationships they have managed for years. Prospecting can be spread broadly without a strong view of which accounts offer the most attractive opportunity.
Commercial resources should follow the economic opportunity. For priority customers and prospects, distributors should develop a practical view of addressable spend, current penetration, profitability, and the categories or needs that offer the greatest potential. That information should shape where salespeople spend their time and what they are trying to accomplish with each account.
An underpenetrated customer with strong economics may justify additional coverage and a specific cross-sell plan. A mature customer with limited remaining opportunity may require less incremental effort, even if it remains one of the company’s largest accounts. A prospect with substantial revenue potential may become much less attractive once freight, service requirements, and expected pricing are considered.
The discipline comes from treating sales coverage as an investment decision. Smaller distributors may use that discipline to build a more focused acquisition engine around customers they have a strong reason to win. Larger distributors may find more value in structured account development and share-of-wallet growth. In both cases, sales resources should be concentrated where the combination of potential and economics is strongest.
Make pricing repeatable
Pricing remains one of the strongest profit levers available to distributors, and many companies have invested heavily in the supporting technology. Investment alone is not solving the pricing problem. Our survey shows that 55% of larger distributors have invested in pricing tools, analytics or dashboards, compared with 27% of smaller companies. Yet almost half of both groups still report mixed or limited discount discipline.
The execution gap deserves attention. Pricing performance is created through thousands of individual decisions made by salespeople and managers. Technology can improve those decisions, but it cannot substitute for the commercial processes, management routines, and accountability around them.
A strong pricing organization has a clear architecture for how customers and products should be priced. Sellers receive practical guidance on target prices and acceptable ranges. Exceptions are visible, approvals are meaningful, and management can see where realized prices are moving away from guidance. Those patterns should then inform coaching, account strategy, and sales incentives.
There will always be judgment in distribution pricing. Local competition varies, customer relationships matter, and product availability or strategic considerations can influence a deal. The objective is to make that judgment more consistent and better informed.
Pricing incentives should reinforce the same goal. If sellers are rewarded primarily for revenue or volume, the organization should not be surprised when price realization takes a secondary role. Stronger pricing performance requires measures and incentives that recognize both growth and the economics of that growth.
Pricing maturity should therefore be judged by the quality and consistency of realized outcomes. The aim is a repeatable management capability that improves price realization every day.
Manage customer economics, not just revenue
Many distributors can describe exactly how much revenue they generate from a customer. Far fewer can describe the full economics of serving that customer with the same confidence. That imbalance has a direct effect on commercial behavior.
Large accounts attract resources. Volume is rewarded. Service levels accumulate over time. Commercial exceptions become embedded in the relationship. A customer can look highly attractive in a sales report while producing disappointing economics once freight, rebates, returns, service intensity, and commercial effort are included.
The survey shows that distributors recognize value leakage across many of these areas. Missed cross-sell opportunities, high cost-to-serve, inefficient sales coverage, and discounting all features prominently. Bringing customer profitability closer to the center of commercial management is one of the most practical ways to address them together.
A fast-growing account with weak economics may require changes in price, mix, or service before more volume is pursued. A profitable customer with significant whitespace may justify additional sales investment. An account that consumes substantial service resources without producing an adequate return may need different terms, a different level of service, or a different channel.
These decisions should become part of normal account management. Customer reviews should include profitability alongside revenue and pipeline. Sales managers should understand where account economics are improving or deteriorating. Incentives should encourage profitable growth rather than volume at any cost.
This is where the distinction between revenue growth and profitable growth becomes operational. Companies that manage both customer potential and customer economics will be in a much stronger position to decide where to invest and where to pull back.
Scale digital and AI where there is a clear payoff
AI has quickly become one of the most visible items on the management agenda, and distributors are actively experimenting with it. But the survey shows that scaled adoption remains limited, while the obstacles are increasingly practical. Forty-two percent of respondents cite integration as a barrier to AI adoption, while 31% point to poor data quality, 31% to trust or explainability, and 29% to unclear ROI.
Most distributors, however, do not need more AI pilots. They need to identify a small number of commercially valuable use cases and make them work at scale.
The most productive starting point is an important commercial decision. Where are employees making high-frequency decisions with incomplete information? Where is judgment inconsistent? Where would even a modest improvement create meaningful economic value?
In distribution, there are plenty of candidates. Quote pricing, next-best-product recommendations, opportunity prioritization, churn identification, demand forecasting, and service automation all have the potential to improve performance. Each use case should have an economic objective from the outset.
If an application is intended to improve quote pricing, the result should show up in realized price, margin, or conversion. If it supports cross-sell, the company should be able to measure incremental penetration. If it automates service, there should be a measurable effect on service cost, responsiveness, or customer experience.
This standard will eliminate some attractive-looking projects, and that is a good outcome. A pilot is easy to launch. Embedding a solution into a commercial workflow, earning frontline adoption, and demonstrating economic value are much harder. Those are the measures that should determine whether an AI initiative deserves to scale.
Focus requires saying no
One finding in the survey deserves particular attention: there is no clear winner in the investment agenda. AI ranks highly, but so do digital commerce, pricing, salesforce effectiveness, margin management, analytics, and several other capabilities.
That reflects the reality facing most leadership teams. There are many legitimate opportunities to improve, and most companies can build a credible business case for several of them at once. The danger is allowing that breadth of opportunity to become an equally broad transformation agenda.
A distributor can find itself implementing CRM, developing AI use cases, improving pricing, redesigning segmentation, and launching a sales-effectiveness initiative at the same time. Every program may make sense independently. Collectively, they can stretch management capacity and make it harder to see which investments improve performance.
Leadership teams need to make choices about sequence. A distributor that cannot see customer profitability clearly has a different starting point from one that already has strong economics but weak frontline adoption. A company with sound pricing analytics and poor discount discipline probably needs stronger management routines, coaching, and incentives before it needs another tool. A commercially mature organization may be ready to automate decisions that another company still needs to define.
The same discipline applies to growth itself. Profitable growth requires the willingness to say no to volume that does not create adequate value, to customers that consume disproportionate resources, and to investments that are interesting but disconnected from the company’s most important economic opportunities.
Commercial execution will separate the winners
Our survey gives us reason to be optimistic about distribution. It also sets a high bar for what the next phase of profitable growth will require.
There is plenty of opportunity, but the operating environment is becoming less forgiving. Customers have more transparency. Competitive pricing pressure remains high. Digital channels are changing how customers buy, and AI is adding another layer of complexity to an already crowded management agenda.
The strongest distributors will be clear about where they want to grow and why. They will direct sales capacity toward the right customers, build pricing into the daily management of the business, understand the economics of the relationships they are growing, and apply digital and AI where the commercial payoff is measurable.
They will also be willing to make harder choices. Some volume is not worth pursuing. Some customers should receive less investment. Some technology projects should not make the cut. Some capabilities need to be fixed before the next one is added.
That is the thesis we take from this year’s survey: the market may create the opportunity, but commercial execution will determine who captures it. Explore our full 2026 Wholesale & Distribution Survey Report for insights into the opportunities shaping profitable growth.
