What is Value Added Reselling?

Value Added Reselling

1. Introduction

Value Added Reselling (VAR) is a key business model. A channel partner enhances a vendor's core offering. They add extra features, components, or specialized services. This creates a comprehensive solution for end customers. This model allows partners to offer more complete solutions. It increases their value within the partner ecosystem.

For example, an IT channel partner might bundle software. They add installation, training, and ongoing support. A manufacturing channel partner integrates a vendor's component. They build it into a larger custom machine. Vendors benefit from expanded market reach. They also gain specialized expertise from their partners. This is often supported through a strong partner program and partner enablement efforts.

2. Context/Background

The VAR model developed as technology became more complex. Early computer hardware needed expert setup. Resellers began adding services like installation. This made products easier for customers to use. Over time, this expanded to software and other industries. Today, VARs are crucial for many businesses. They bridge the gap between complex products and customer needs. They help vendors scale without hiring all the necessary specialists.

3. Core Principles

• Enhancement: VARs add significant value beyond the base product. They create a more complete offering.
• Integration: VARs often combine multiple products or services. This forms a unified solution.
• Specialization: VARs typically focus on specific industries or customer segments. This builds deep expertise.
• Customer Focus: Solutions are tailored to solve specific customer problems. This improves the customer experience.
• Profitability: VARs generate revenue from both the product and the added services. This increases their margins.

4. Implementation

1. Identify Niche: Select a specific market or customer need. Understand their unique challenges.
2. Select Vendor: Choose a vendor whose products fit your niche. Ensure their partner program supports VARs.
3. Develop Value-Add: Design services or components to enhance the vendor's product. This could be customization or support.
4. Build Expertise: Train your team on both the vendor's product and your value-add. Ensure strong partner enablement.
5. Market Solution: Promote your integrated offering, not just the vendor's product. Highlight the added benefits.
6. Deliver and Support: Provide excellent implementation and ongoing customer support. Maintain strong relationships.

5. Best Practices vs Pitfalls

Best Practices (Do's)

• Deepen Expertise: Become a specialist in your chosen solution area.
• Focus on Outcomes: Sell solutions based on customer benefits, not just features.
• Invest in Training: Keep your team updated on product and service developments.
• Use Partner Portal: Use vendor resources for training, marketing, and deal registration.
• Strong Customer Service: Build long-term relationships through excellent support.

Pitfalls (Don'ts)

• Selling Just Products: Failing to differentiate with value-added services.
• Lack of Specialization: Trying to be everything to everyone, diluting expertise.
• Poor Partner Enablement: Not investing in continuous learning and skill development.
• Ignoring Vendor Programs: Not fully using benefits like co-selling support or incentives.
• Inconsistent Service: Providing uneven customer experience, damaging reputation.

6. Advanced Applications

1. Managed Services: Offering ongoing management and optimization of solutions.
2. Industry-Specific Solutions: Developing highly specialized offerings for vertical markets.
3. Cloud Integration: Bundling cloud services with on-premise solutions.
4. IoT Solutions: Integrating vendor hardware with custom software and analytics.
5. Digital Transformation: Guiding customers through complex technology shifts.
6. Custom Manufacturing: Incorporating vendor components into bespoke industrial systems.

7. Ecosystem Integration

VARs are central to the partner ecosystem. They fit into the Strategize phase by identifying market gaps. In Recruit, vendors seek VARs with specific expertise. Onboard ensures VARs understand products and programs. Partner enablement is critical for VARs to develop their value-add. Market involves VARs using through-channel marketing to promote solutions. Sell includes VARs closing deals, often with deal registration. Incentivize rewards VARs for their value and sales. Accelerate focuses on growing VAR capabilities and market reach.

8. Conclusion

Value Added Reselling is a powerful channel partner model. It allows partners to create comprehensive solutions. They combine vendor products with their own expertise and services. This enhances customer satisfaction and expands market reach for vendors.

Successful VARs deeply understand customer needs. They continually invest in their own capabilities. They also use vendor partner program resources. This strategic approach drives mutual growth and strengthens the entire partner ecosystem.