Business 101: Choosing Vars for Your Product
Last updated: 6/16/2002; 10:21:43 AM
 
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Business 101: Choosing Vars for Your Product

VAR.  Value Added Reseller.  What’s this really mean in today’s world?

The idea of the value added reseller is a pretty old one in reselling computing products, either hardware or software.   The basic idea is that for complex products the end customer just can’t do it by themselves.  Think about accounting software for example.  No matter how easy the product is, say QuickBooks, people still need help.  Thus, for example, you could become a QuickBooks VAR.  Another way to look at this is that VARs are the McDonald’s of high technology.  No, no, no.  Don’t throw things at me. 

VARs: The Basic Idea

The basic idea behind a VAR is very simple

The Contract

Ah yes… The reseller contract.  This is a very, very difficult document to write, to edit, to agree on.  I’ve done them in the past and, to be really honest, they’re a pain in the ass.   Still, I do think they are necessary and actually quite important.  Here’s why:

  1. Contracts make business real.  They make the idea that both parties have obligations very apparent.
  2. Contracts outline (or should) what each party is responsible for.
  3. Contracts cover cost & revenue issues.
  4. Contracts cover how sales leads are handled which is very important from the perspective of the VAR, less so from the perspective of the reseller.

Now that we’ve gone over the basic reasons for a contract, the question becomes “Who writes the damn thing?”.  The answer is simple – it’s the manufacturer’s responsibility. 

What Goes into a VAR Contract?

Disclaimer: IANAL (I am not a lawyer).  Get real legal help on this one.  Still, you probably won’t anyway, so here’s what I would want to see from the perspective of the manufacturer and the VAR.

  • Manufacturer Issues

  • Expectations of sales volume & penalties / benefits.
  •  
  • Var Issues

  • How technical support is handled.

 

Have a Sample Contract?

I rarely if ever write documents from scratch.  Google is far, far faster – if you actually read the documents you are going to use as a template.  Here are some starting points:

Questions and Answers

Q: I’m a manufacturer.  Do I want to sign a master VAR or not?

A: Not on your life (IMHO).  Here’s why.  The idea of a master VAR is that you pick one company to represent you for a given large geographic region.  For example, an Italian software company might choose to pick a single master VAR for the entire United States.  This is a great deal for the VAR and a horrible one for manufacturer – it just puts too much control in the hands of the VAR. 

See Also

 

Glossary

  • Var.
  • Master Var.
  • Reseller Contract. 
  • Lead. 
 
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