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What is a Value-Added Reseller?

July 24, 2017
Debbie Schwake, VP Marketing

The definition of a value-added reseller (VAR) is a company that adds features or services to an existing product, then resells it as an integrated product or complete turn-key solution.

Let’s say your company manufactures and distributes cars. Your company focuses on building standard, cost-effective sedans for people with limited budgets. One day, you’re approached by another company, a non-competitor, that fabricates and mounts aftermarket parts, and wants to enter your distribution chain. The owner of the parts manufacturer would like to purchase your company’s line of sedans, install its custom accessories onto each vehicle, and resell the cars at its own dealership.

In effect, this company is adding value to the product you’re making and selling a new, integrated product to car enthusiasts. While this is arguably something of a basic example, the company that approached you is what we call a value-added reseller (VAR).

How Value-Added Resellers Function in Tech

In tech, value-added resellers have created a multi-billion-dollar industry. They identify which products would benefit their customers, buy them directly from the company of origin, and then sell them in a package.

For example, let’s say one company makes enterprise-class routers. Another company, which is not a competitor, creates an application to improve router functionality. These two companies create complementary products, correct? In this scenario, a third party, a VAR, might purchase both products, bundle them, and resell the package as a turnkey solution.

Some companies approach value add-ons differently. Instead of adding a tangible product, they include professional services, such as turnkey IT, consulting, and software training. These kind of VARs serve as managed service providers (MSPs), coordinating contact between organizations and handling large-scale IT projects.

Value-added resellers capitalize on inefficiencies in the tech market by offering integrated products. Without this streamlining effort, consumers would have to sort through an ocean of software and hardware products, pick out what would work best to solve their business challenge and purchase each product or application individually.

This point cannot be understated because the time it takes to investigate, find, source, and implement component parts into a full solution can be quite overwhelming.

A value-added reseller (VAR) can save you from the time it takes to investigate, find, source, and implement component parts of a full technology solution.

Value Added Resellers in Practice

So how really does this benefit you? Take digital signage as an example. A complete digital signage solution requires screens, media players, mounts, and peripherals such as connections and cords. Further, these must be installed, mounted, and tested to ensure the equipment works properly and delivers the outcome you were looking for.

But as a business owner in need of a digital signage solution, where do you begin? You really have two choices – source all the component parts yourself, or partner with a value-added reseller. The latter is a trusted advisor who stakes their entire business on knowing the industry and the latest trends in order to deliver to you, their ultimate customer, the best value for your budget.

When it comes to technology, your options are unlimited and the solutions are always changing. Consider seeking a value-added reseller to help you navigate the clutter and find the best solution to meet your technology and automation goals.