It is important to ensure that a VAR agreement is in line with commercial objectives and that its provisions are realistic. Since VAR agreements are legally binding, non-compliance with contractual conditions can result not only in early termination of the contract, but also in legal action and fines. A VAR agreement is a legal contract between a producer and a value-added reseller, which defines the rights and obligations of both parties. A VAR buys a product from a manufacturer, somehow increases the added value for that product, and then sells the product as its own. An AGREEMENT of the VAR sets out the conditions to be met during this process. Value-added resellers exist because they are an important distribution channel for manufacturers, particularly in the area of information technology. A value-added reseller accepts a basic hardware or software product or system and adapts a set of additional system add-ons for a customer. The dealer is not the manufacturer of the devices, but is expected to have a thorough knowledge of the product to adapt, install, test and maintain it properly for the customer. As the price of hardware declines and more and more companies move from internal servers and other hardware to cloud computing solutions, VARs are finding it more difficult to maintain the margins, revenue and competitive position they enjoyed in the past. In addition, var sales were traditionally unique, meaning that once the equipment was sold to a customer, the training was completed or the short-term project was completed, the sale was completed and the VAR was passed to the next customer. An added value provider (VAR) is a company that adds features or services to an existing product and then resells it (usually to end-users) as an integrated product or a complete “key” solution.
This practice often takes place in the electronics or information technology sectors, where, for example. B, a var can pool a software application with supplied hardware. [Citation required] The added value of resellers plays an important and prominent role in the information technology sector. Depending on the level of service, they can obtain a Cisco “Selection,” “Premiere” or “Gold” certification. Cisco continues to provide training to resellers to specialize in a number of areas such as enterprise networks, cybersecurity, the Internet of Things (IoT) and data centers. At regular intervals, value-added resellers must submit to Cisco audits to demonstrate their continued creditworthiness as members of the reseller network. In addition, a retailer has little or no control over the quality or characteristics of its product and must rely on its manufacturer to adapt to changing customer requirements. Most of the VARs margin comes from value-added products and services, not from the products themselves, which are generally low-marked. There is no standardized VAR program. Each company has a unique business environment, conditions and methods.
A reseller added to the value may increase its potential for repeating operations because of the added value it offers. A VAR can also serve as a central point of contact for customers of certain products and solutions. A VAR is often better positioned to understand customer challenges and offer the kind of know-how that ensures customer satisfaction. With the widespread deployment of cloud computing services, the role of the traditional value provider added, which offers products with services vis-à-vis, is becoming a strategic provider of technology solutions. Like many managed service providers (PSMs), VARs become consultants and not just order takers.