Understanding what a Value-Added Reseller is and What They Do

A value-added reseller (VAR) is a business entity that gains permission from a supplier or OEM to enhance a product. The VAR will customize a product by adding new and valuable features, which enables the value-added resellers to resell the product for a higher price. 

Essentially, the primary goal of a VAR is to increase the desirability of a product, which in turn drives sales and provides the supplier with exposure. It’s important to note that value-added resellers are not manufacturers, but rather a distribution channel for manufacturers. 

In this article, we will discuss the benefits and the challenges of working with value-added resellers.

The Benefits of Working with a VAR

Partnering with a value-added reseller offers businesses many advantages in addition to simply adding customized features. Listed below are just a few of the benefits of working with a value-added reseller. 

Professional Expertise

Each VAR typically specializes in a specific industry, allowing them to be experts in their field while staying up to date with new industry trends. Through their professional expertise, VARs are better positioned to not only create a highly desirable product for customers – but also support options and solutions. As a result, customers will be more satisfied with their purchase and will be more likely to purchase again.

Effective Marketing Tool 

Did you know that VARs can act as an effective marketing tool for manufacturers? VARs evaluate the features most wanted by consumers and tailor the product to fill their needs. Their customized product enhancements can increase the desirability to stand out from the competition.  This offers a competitive advantage in the market which will generate revenue and have a positive impact on the supplier.

 Beyond Point of Sale

VARs don’t just stop their services at the point of sale, their services go beyond that. VARs will assist businesses in purchasing harmonious items for their infrastructure, planning for renewals and replacements, budgeting, and navigating solutions. Services from a VAR ensure businesses are supported throughout the entire process, which will ultimately guarantee success. 

The Challenges of Working with a VAR

It’s no secret that most new business opportunities come with challenges, as it takes time to find the right process that works for each individual business. Listed below are some common yet avoidable challenges of working with a value-added reseller.

Reputation

One of the most common challenges to overcome is the general misconception of a Value Added Reseller's function. Businesses are often hesitant when considering working with a VAR simply because they do not have a full understanding of their intended purpose. Oftentimes, people think VARs are diminishing a product by making negative changes to it or that they are reducing potential profit from the supplier.  Do your homework and ask for references and successful case studies.

Continued Education

In order for a VAR to be successful in what they do, they need to continually acquire education in the industry they specialize in. If a VAR is not up to date on new trends and technologies, it won’t be able to effectively customize products that customers will want. This could ultimately result in low-profit margins because the VAR won’t be able to sell the customized product for a higher price if it is not desirable.

VARs Can Be a Valuable Tool for Your Business

Value-added resellers provide project-based solutions to enhance a business’s existing products and services. VARs are known to be an effective marketing tool for companies looking to gain market share and differentiate themselves from the competition.  Are you considering adding customized features to your products as a way to increase sales? Our experts are happy to help you discover the solutions you need for your business. 

For more information on how Group O can help your company, give us a call at (866) 476-8761.