What Are Value-Added Resellers (VARs)? Definition, Roles, and Real-World Examples
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Summary:
Value-added resellers (VARs) are integral to the IT industry, enhancing third-party products by providing customized services and solutions. This article explores VARs in detail, from their role in different industries to the benefits and challenges they face. We’ll also cover the VAR program of a prominent IT manufacturer, Cisco, to shed light on the practical aspects. Whether you’re a business owner, a manufacturer, or someone looking to understand VARs better, this article offers comprehensive insights into their world.
What is a value-added reseller (VAR)?
A value-added reseller (VAR) is a company or entity that adds value to third-party products by offering customized services or solutions, which are then resold to end-users. VARs play a significant role in various industries, but they are most prominent in the Information Technology (IT) sector. Their primary function is to enhance core products, whether hardware, software, or complete systems, by bundling additional services, support, or complementary products.
Understanding value-added reseller
Value-added resellers serve as an essential distribution channel for manufacturers. They take an existing product and customize it to meet the specific needs of their customers. VARs don’t manufacture the core products themselves; instead, they rely on their expertise to tailor, install, test, and maintain the products for end-users.
These resellers are not limited to representing a single company; many work with multiple brands, providing customers with a broader range of choices. The success of VARs is often tied to their in-depth knowledge of the products they work with and their ability to add significant value to these products.
Role of value-added resellers
VARs play several crucial roles in the business ecosystem:
Enhancing products
One of the primary functions of VARs is to enhance the core products. They do this by adding services, support, or complementary products, making the offering more valuable and attractive to end-users.
Customization
VARs tailor the products to meet the unique requirements of their customers. This customization can include anything from software configurations to hardware installations, ensuring that the solution fits perfectly.
Installation and maintenance
VARs are responsible for the installation, testing, and maintenance of the products they resell. They provide comprehensive support to end-users, ensuring that the products work as intended.
Consultation
Many VARs offer consulting services, helping customers choose the right solutions and providing expert advice on various products and technologies. This consultancy can be invaluable, especially in complex industries like IT.
Key industries for VARs
While VARs can be found in various sectors, they are particularly prevalent in specific industries:
Information Technology (IT)
IT VARs are highly common, serving businesses that require customized IT solutions. They offer services such as network setup, security, cloud integration, and software configurations.
Telecommunications
Telecom VARs specialize in enhancing telecom infrastructure, offering services like setting up phone systems, data networks, and VoIP solutions. Their customization is critical in ensuring efficient communication for businesses.
Healthcare
In the healthcare industry, VARs play a crucial role in implementing Electronic Health Records (EHR) systems, medical imaging solutions, and telemedicine platforms, tailoring them to the specific needs of healthcare providers.
Manufacturing
Manufacturing VARs offer solutions that enhance production processes, including automation, control systems, and quality assurance. They help manufacturers optimize their operations for increased efficiency and reduced costs.
Example of value-added reseller: Cisco
Cisco, a renowned IT product manufacturer, operates a comprehensive VAR program. This program includes:
Authorization
VARs must obtain authorization from Cisco, demonstrating their capabilities to support the sales of Cisco products.
Certification
Depending on their level of service, VARs may receive designations such as “select,” “premier,” or “gold” certification from Cisco, indicating their expertise in specific areas like cybersecurity, data centers, or IoT.
Training
Cisco provides specialized training to VARs, ensuring they have the necessary knowledge and skills to serve their customers effectively. This training covers a wide range of areas, from enterprise networks to cutting-edge technologies like IoT.
Audits
Cisco conducts periodic audits to assess the ongoing quality of its VAR network. VARs must maintain high standards and continue to meet Cisco’s criteria for partnership.
Frequently asked questions
Do value-added resellers manufacture the core products they sell?
No, value-added resellers do not manufacture the core products themselves. They enhance these products by offering customized services, support, and complementary products.
How do value-added resellers benefit end-users?
VARs benefit end-users by providing tailored solutions that precisely meet their needs. They offer expert guidance, installation, and ongoing support, ensuring that the products work optimally for customers.
What industries commonly use value-added resellers?
VARs are most prevalent in the IT sector, but they are also found in telecommunications, healthcare, manufacturing, and various other industries where customization and expertise are essential.
Can VARs work with multiple brands?
Yes, many VARs work with multiple brands, offering customers a broader range of choices and solutions to meet their specific requirements.
Key takeaways
- Value-added resellers (VARs) enhance third-party products by providing customized services and solutions, particularly in the IT sector.
- Cisco’s VAR program exemplifies the standards and support provided by manufacturers to VARs.
- VARs play crucial roles in enhancing products, customizing solutions, providing consultation, and maintaining products.
- VARs are prevalent in industries like IT, telecommunications, healthcare, and manufacturing.
- The benefits of working with VARs include customization, expertise, comprehensive support, choice, and enhanced value.
- Drawbacks of working with VARs may include limited cost control and dependence on manufacturers for product adaptations.
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