What is a value-added reseller?

As the name suggests, a value-added reseller (VAR) gets goods from suppliers and then sells them to customers. After that, the reseller runs the business and deals with customers, so the provider doesn’t have to.

In this process, the reseller adds value to the product by giving it extra features or services before selling it to the end user. This could be any service that adds value for the customer, like installation, customization, technical help, training, or anything else.

Business-to-business (B2B) technology service companies like this business plan because a VAR can bring in extra money for both the vendor and the customer. Value-added resellers (VARs) can fill gaps in the market by providing services that vendors don’t offer (don’t offer as well), which is suitable for everyone involved.

VARs are also becoming more popular in business-to-consumer (B2C) settings, where users may like having one person they can talk to about all their product needs.

Synonyms

• VAR is the abbreviation for the t”rm “value-added resel”er.”
• White Labeling: VARs may also purchase products from a manufacturer and th”n “white la”el” them, which means they relabel the item with their branding or logo.
• Reseller Partner: A term used to describe the relationship between a VAR and the manufacturer or other vendor that supplies them with products.

When a VAR buys goods from a manufacturer or other vendor, that manufacturer or vendor is called a reseller partner.

The Business Model for Value-Added Resellers

VARs often charge more for their services because they add features or services to a product before selling it.

You can be a VAR in two ways:

• Value-Added Services: In this type of business, the VAR offers extra professional services to the client, like installation, customization, or technical support. The customer might be willing to pay more for these services on top of the white-labeled services from the first vendor.
• Products with added value: A VAR may also buy goods from a vendor and add features or parts before selling them. This could include extra software, hardware, tools, or anything else that makes the first item more valuable.

This business model works well when there is a clear need in the market for specialized goods and services that makers might not be able to provide quickly or cheaply. It also lets sellers use current sales channels instead of spending money to make their own.

Some VARs may also provide extra services, like help with marketing, system integration, ongoing repair, and training. This can help them stand out from others in the same field and give people more value.

Figuring out How Value-Added Resellers Do Their Job

As a VAR, you can use your current relationships to your advantage when selling third-party products. This lets you offer your customers specialized products. As long as the extra value is clear, it can be an excellent way for businesses to make more money and set themselves apart in their markets.

To put it simply, this is how the value-added reseller approach works:

• A VAR buys goods from a seller at a set price, usually less than the market price. They then change some things about the goods and sell them to customers again.
• As a general rule, the VAR offers extra services that the maker might not offer directly, like order fulfillment, installation, customization, training, and support. When the VAR takes on these duties, they can offer their customers better.
• The VAR gets paid more than you would expect for their skills, which lets them make a profit.
• It works out well for both sellers and customers in the end.

As it turns out, value-added providers can benefit companies that want to find new ways to make money and get more customers. What is good about working with VARs?

There are many benefits for both the seller and the customer when they work with VARs:

• Companies that sell goods can increase sales without lowering their profit rates or spending money on more sales equipment.
• VARs can give customers customization and personalized service they might not get from the original provider.
• VARs make it easy for customers to buy things because they can talk to one person about their needs, which improves the customer experience.
• VARs can quickly and easily change goods to meet the needs of each customer, making them more agile and flexible than traditional product vendors.
• Resellers who add value for customers improve their relationships by giving them access to new goods and services that the original vendor might not offer.
• Original solution providers and makers can increase their sales without having to find new customers all the time because the reseller does that for them.

Because of these pros, third-party resale is often the best way for tech companies and makers to get their products to customers, especially when the market is very competitive or specialized.

The Hard Things About Working With VARs

Some problems come up when you work with VARs. Some of these are: • VARs might not always know much about the product or technology they’re selling, which means they might be unable to give reasonable help or advice.

• VARs must be careful about setting prices too low because if they do, they could go up against the vendor’s direct sales channels.
• Reseller partners might not always be reliable, so the seller must ensure their goods are being sold correctly.
• To stand out from the competition, a dealer needs to know a lot about theiniche’s technical aspects and be able to offer services that add value.

Because of these issues, it is essential for vendors to carefully check out possible value-added resellers before they agree to work together.

MSP vs. VAR

A managed service provider, or MSP, is a certain kind of value-added contractor. There are, however, some minor changes between the two.

• Most MSPs focus on services rather than products, while most VARs focus on selling goods.
• When they sell a software product, MSPs usually offer ongoing support and maintenance services after installing the product. VARs, on the other hand, may only offer initial installation services or resell a product. • MSPs have a more technical focus because they need to know much about the software systems and technologies they support.

OEM vs. VAR

• An original equipment maker (OEM) is a business that plans, builds, and sends customers finished goods.
• VARs, on the other hand, buy things from other companies and then sell them again, but this time, they add services like training, support, and customization.
• VARs buy goods and then sell them again, which is called a two-tier distribution model. VARs are not in charge of designing or making the products they sell. This means that VARs can change their services faster to meet the wants of their customers.

What CPQ Does to Help VARs Sell More

For Value-Added Reseller, CPQ software is a must-have because it helps simplify and speed up the sales process. With CPQ software, VARs can quickly make correct quotes and include the most recent price information. It’s also easier to keep track of sales from customers, keep track of stock, and give customers quick access to product information.

Value-Added Reseller can provide better customer service and more accurate rates using CPQ software. This makes the sales process run more smoothly, speeds up quote-to-cash (QTC), and makes customers happier.

CPQ software automates time-consuming manual tasks like price calculations, configuration, and approvals. This makes the sales process less labor-intensive, especially for businesses with complex pricing models (e.g., enterprise service contracts) or complex products.