Definition of Value-Added Reseller (VAR)
A Value-Added Reseller (VAR) is a company that resells another vendor’s products or services while adding its own value through additional features, integrations, customizations, or support services. Unlike a plain distributor, a VAR does not simply move products; it enhances them to better meet specific customer needs before selling them to the end customer.
How VARs Operate
VARs are common in the technology industry, where products often require configuration, integration, or ongoing support. A VAR may resell a software platform while also handling installation, customization, training, and maintenance. By bundling products with services, VARs deliver turnkey or specialized solutions that customers may not be able to assemble on their own.
Why VARs Exist
VARs provide value by tailoring generic products to specific use cases, industries, or geographies. They often have deep expertise in particular verticals, such as healthcare, education, or manufacturing, allowing them to adapt standard software or hardware into industry-specific solutions. This benefits customers who want a more complete, ready-to-use offering and benefits vendors who can reach markets they may not easily serve directly.
Value-Added Resellers Explained for a General Audience
For a general audience, a VAR is a middleman who does more than just sell a product. Instead of buying raw software or hardware from multiple vendors and setting it up yourself, a VAR packages the right components together, installs them, customizes them if needed, and supports them after the sale. Customers pay the VAR for the full solution, and the VAR pays the original vendors while keeping a margin for the added value they provide.
How VARs Make Money
VARs typically earn revenue through margins or discounts received from the original vendor, which they mark up when selling the bundled solution to customers. This pricing reflects not only the product itself but also the services, expertise, and ongoing support included in the offering.
VARs in Channel and Distributor Sales
VARs play an important role in channel sales, acting as intermediaries between vendors and end customers. Channel and reseller structures can introduce complexity into contracts, billing, and payment flows, especially when multiple parties are involved in a single deal.
VARs in Ratio’s Context
From Ratio’s perspective, VARs and distributors are a key use case. VARs often offer flexible payment terms to customers while needing to pay vendors sooner, which can strain working capital. Ratio’s financing solutions can help VARs offer payment flexibility without carrying the financial risk or waiting for customer payments. Ratio also supports reseller, channel, and marketplace sales structures, which are more complex than direct sales and often difficult to finance through traditional models.
Why VARs Matter in a Glossary Context
Including VARs in a glossary helps clarify a common enterprise sales and distribution term that is directly relevant to financing, cash flow, and risk management. Understanding what a VAR is provides context for how financing solutions can support indirect sales models and multi-party transactions.
Summary
A Value-Added Reseller is a reseller that enhances a vendor’s product with additional services, customization, or expertise before selling it to the end customer. VARs create value by delivering tailored, turnkey solutions and expanding vendor reach into specialized markets. By enabling financing and risk mitigation for VAR-led deals, Ratio helps VARs scale faster while reducing working capital pressure and financial risk.
