What is a Value-Added Reseller?
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.
Value-Added Resellers in Practice
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, source, and implement component parts into a full solution can be quite overwhelming.
Key Factors for Choosing the Right VAR Partner
When the time comes to implement or update technology to grow your business, where do you start? First, begin by deciding not to take on the complicated task of buying products from a variety of sources, or to spend your valuable time and manpower integrating them.
A quality VAR will deliver a turnkey solution that expedites the overall project and provides the best value for your budget. They will work closely with you to match their expertise and deliverables to your goals and customize services and products to best solve your needs. Plus, they’ll take ownership of the installation with ongoing service.
While choosing a VAR isn’t an exact science, it’s important to do your homework and evaluate potential candidates before signing a formal agreement. Here are some key focus areas to consider to help you narrow down your choices.
1. Define Your Goals & VAR Expectations
Before you can find the perfect match in a VAR, it's essential to identify your needs and establish a preliminary scope of work, timeframe, and budget. The answers to these questions will not only help you identify the right partner, but also help build the groundwork for your future agreement. Also, make a list of qualifying questions to help you during your own discovery process and in your interviews to zero-in on the best VAR candidates for your job. Some example questions are:
- Does the VAR’s areas of expertise and services match your needs?
- How thorough is their discovery process to determine project requirements?
- Does the VAR have demonstrated expertise in your industry?
- Does the VAR offer top tier products and services?
- Can the VAR meet your timeline needs?
- Are you confident in the VAR’s ability to keep your project on track and within budget?
Many of the answers to these questions will become evident once you do your due diligence in the following areas:
2. Size, Scope, Years in Business, & Reputation
Check out the business profile of the company. Note how long they have been in business. Longevity in the technology world can be a good indication of company’s stability and success.
Also, be sure to determine the depth of their staff and coverage area. This will help you determine how well a VAR can promptly service your locations/operational needs.
Furthermore, check to see if the VAR has a high level of referral business and retention rates. This speaks volumes about their quality of service and customer satisfaction.
3. Quality References
Most VAR’s will willingly provide references. You’ll want to contact at least three and ask questions that help identify issues relevant to you. For example: How well did the VAR respond when you had a technical issue or emergency?
It’s also important to find out how the VAR deals with problems or provides service after the sale. Ask the tough questions: Were projects completed on time and as estimated?
Make sure you speak with references from past projects as well as those of current projects to give you a thorough overview. The goal is to find a company that provides excellent service and accountability throughout the relationship and responds quickly to minimize downtime or disruptions in customer service.
4. Demonstrated Experience/Certifications
Search for the most experienced VAR you can find in your particular industry. One way a VAR delivers added value is by being proactive instead of reactive, and that comes from keeping up-to-date on the latest product offerings, software, and innovative applications pertinent to your industry and markets.
Also, be sure to check the VAR’s memberships in accredited associations and that the team members have the latest certifications from the manufacturers they represent. You can take confidence in this level of expertise from your VAR when installing, repairing, or maintaining your equipment.
With all things being equal, choose a resource that is dedicated to establishing a long-term relationship with you. You want somebody who will be there for you over the long haul.
5. Superior Service Delivery
Be sure to identify who will be in charge of the team working on your account and ask about their experience level and technical expertise. You’ll want a top-level project management office (PMO), including a project manager in charge and a highly qualified project delivery team to perform quality work.
You’ll also want to work with a company that quickly responds to your immediate requests, as well as your ongoing needs. With all things being equal, choose a resource that is dedicated to establishing a long-term relationship with you.
It’s important not to rush your decision. Look closely at each VAR’s years of experience, industry expertise, quality of work, client track record, and support capabilities. Factor in your face-to-face impressions and interactions with key team players. The goal here is to establish the beginning of a great working partnership. Take your time and review all the options. In the long run, you’ll be glad you did.