A value-added reseller (VAR) is a company that enhances third-party products by bundling them with additional services or features before reselling them to end-users. This added value often includes services like installation, consulting, customization, and technical support, transforming a standard product into a tailored solution. By doing so, VARs act as a critical distribution channel for manufacturers, particularly within the information technology industry.
Partnering with a VAR offers businesses a strategic advantage beyond simple product acquisition. They act as a bridge between manufacturers and end-users, providing tailored solutions that address specific challenges. This collaboration can lead to enhanced efficiency, specialized support, and streamlined operations for your organization.
The information technology sector is the most prominent area where VARs operate. They provide comprehensive IT solutions by bundling hardware, software, and networking components. These resellers add services like installation and consulting to create turnkey systems for businesses.
Beyond IT, the VAR model is also found in other sectors. Auto dealerships act as VARs by offering extended warranties, while furniture companies may provide design services. Specialized VARs also cater to the unique needs of industries like healthcare and finance.
While both help companies with technology, value-added resellers and managed service providers operate on fundamentally different business models.
This is how you can select the right value-added reseller for your business.
The value-added reseller market is undergoing a significant transformation, driven by evolving technologies and shifting customer demands. To remain competitive, VARs are adapting their business models away from traditional one-time sales. This evolution is marked by a strategic pivot towards service-oriented, recurring revenue streams.
How do VARs make money?
VARs buy products at a discount and resell them at a markup. Their profit comes from this margin plus fees for bundled services like customization, installation, and ongoing support, which create a comprehensive solution for the customer.
Is a VAR the same as a distributor?
No. Distributors focus on logistics and high-volume sales. VARs enhance products with services like consulting and support to create tailored solutions, adding a layer of expertise that distributors typically do not provide.
Why not buy directly from the manufacturer?
Buying direct gets you the product, but a VAR provides a complete solution. They offer specialized expertise, integration, and a single point of contact for support, saving you the complexity of managing it all yourself.
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