Examples of common value-added resellers (also known as VARs) are computer retailers and service companies, automobile dealerships, and furniture stores. Value-added resellers are businesses that sell products manufactured by other companies in addition to selling their own supplemental products and services, thereby increasing the value of the resold product purchased by the consumer. One of the major aims of companies in providing value-added services is to develop relationships with customers that will lead to repeat business.

Key Takeaways

  • A value-added reseller is a company that enhances another company's products by adding valuable features or services to those products.
  • Because they have added value to third-party products, value-added resellers can then resell those products at a higher price.
  • You can find examples of value-added resellers in the computer, automobile, and furniture industries.

Computer Retailers and Service Companies

Value-added resellers are found extensively at the retail level for computer hardware and services. Computer retailers and computer technology service companies typically offer a wide range of value-added products and services, including extended warranties and service contracts, supplemental hardware, installation, setup, training services, professional consulting services, customization, and software programs.

Information technology companies that work with corporations will often sell value-added packages that create customized, turnkey solutions. For example, a corporation looking to upgrade its network infrastructure might hire a value-added reseller to develop a bundled package that includes hardware, software, customized apps, implementation, training, and ongoing support.

In order to create an enhanced product or service, a value-added reseller must first be careful to select third-party products from reliable manufacturers that produce quality goods.

Automobile Dealerships

Automobile dealerships most commonly offer value-added products and services in the forms of extended warranties and service contracts, or custom-made accessory parts or engine enhancements. Not all value-added services directly produce additional revenue for a company.

For example, included within the value-added services offered by automobile dealers are typically things such as offering a free rental car for a customer's use during a period when the customer's car is at the dealership for repairs. Such a service is solely aimed at developing customer relationships for repeat business.

Furniture Companies

One industry not as frequently thought of as a value-added reseller is the furniture industry. However, to increase sales revenues and build customer loyalty, furniture stores offer additional services such as interior decorating, either in a consulting or direct service capacity.

Some home furnishing companies offer consultations with interior designers who will visit the customer's home, take photos, measure the space, and make design recommendations based on the customer's budget and style preferences. Some designers will use computer modeling tools to help the customer visualize what the furniture will look like in their space.

Companies that specialize in selling office furniture to large corporate clients will include space planning as a value-added service. They'll work with the client to create drawings that map out the office space with the exact placement of the furniture for reception areas, cubicles, executive offices, workspaces, and conference rooms.

For both home and office furniture companies, the goal is to simplify the furniture-buying process for the customer. By including professional design and space planning services as part of what they offer, these companies are removing what could be stumbling blocks to making the sale.

The Bottom Line

By selling value-added products and services, a company can increase its competitive advantage over other companies. These enhanced services and products are appealing to those customers who are looking for a "one-stop-shop" to quickly meet their needs. Value-added products and services are also important to clients who have large projects that require many components. Rather than spending the time, money, and effort to source individual components, these clients look to value-added resellers to provide them with a finished solution.