A business model where a company enhances an existing product or service by incorporating additional features, integrations, or services before reselling it to end customers. The value-added component is what differentiates a VAR from a standard distributor or retailer. This value often comes in the form of customization, installation, consulting, training, or ongoing support tailored to the customer’s unique needs. VARs play a crucial role in complex technology ecosystems, particularly in industries where products are not sold as standalone items but rather as part of comprehensive solutions.
Common Industries
VARs are prevalent in the electronics and IT industries. For example, a VAR might bundle a software application with supplied hardware, creating a turnkey solution tailored to specific customer needs.
Value-Added Services
The added value can come from professional services such as integrating, customizing, consulting, training, and implementation. VARs may also develop specific applications for the product designed for the customer’s needs, then resell it as a new package.
Benefits for Manufacturers and Customers
Manufacturers and service providers benefit from VARs because they extend market reach and customer support without expanding their own operations. Customers gain from the VAR’s domain expertise and localized support, which can significantly improve deployment success and total cost of ownership.
Evolution of the VAR Model
In modern contexts, the VAR model has evolved beyond physical hardware and traditional software licensing. Cloud platforms, SaaS products, and managed service providers (MSPs) have incorporated the same principle, offering layered value such as analytics, integration, and automation. This evolution has blurred the line between VARs, system integrators, and channel partners. Still, the central idea remains: to enhance and resell a solution in a way that adds measurable value to customers.