VARs, or Value Added Resellers, are companies that take a current product (often OEM hardware) and increase its value, either by combining that product with additional products and software (such as building custom computers with unique software installed), upgrading that product to fit the needs of a specific niche market, or improving the customer service aspects of a product by offering troubleshooting and/or consulting and installation services.
Once the value add is in place, the VAR will mark up the price of that product and sell it to consumers and business owners.
Do VARs traditionally target certain industries?
Value Added Resellers have seen lucrative growth within the computer industry for years by providing installation and troubleshooting services as well as specialty hardware and software installations. However, any business that adds value to a product or service, either through a piece of hardware or a service, could be considered a VAR.
What are some of the problems faced by VARs today?
VARs have historically done very well in the industries that they’ve been a part of. However, a recent increase in competition, combined with a dramatic decrease in OEM hardware prices, has left many VARs scrambling to identify new services to offer their clients. Without strategies and software in place that reduce costs, rapidly identify upsells, and increase efficiency, a VAR can quickly go from successful to bankrupt in a matter of months.
How have VARs adapted to confront these problems?
While there isn’t much that VARs can do to stop declining OEM prices, they still have opportunities when it comes to streamlining their own business processes and identifying new avenues of value add for their customers. VARs have looked toward advances in SCM (Supply Chain Management) and PSA (Professional Services Automation) platforms to reduce manufacturing costs and improve resource management respectively. At the same time, resourceful VARs are working closely with their customers and clients to identify new ways to add value to the company’s product and service portfolio.
Why have so many VARs switched to cloud solutions in recent years?
The cloud provides immeasurable benefits to VARs. First off, it nearly eliminates startup costs, allowing new companies to compete based off of products and services offered rather than how much venture capital they can scrounge up. Secondly, one platform for all of a company’s backend processes allows for far greater communication and efficiency across departments. Gone are the days where sales can’t accurately quote a price to a new customer, or manufacturing can’t access customer order data promptly from a smartphone.
Lastly, the cloud makes it possible for companies to test new offers and bundles without completely upending current pricing structures and organization. This is a critical aspect of any modern day VAR, which lives or dies based off of its ability to identify client needs and push new value adds as efficiently as possible.
How do VARs benefit when they combine their backend (FinancialForce.com) and frontend (Salesforce1) processes onto a single platform?
FinancialForce.com exists today because we understand how powerful service automation and integration can be for business. That’s why we integrated our own backend cloud services with Salesforce, the leading provider of frontend CRM (Customer Response Management). By doing so, FinancialForce.com and Salesforce can create a truly comprehensive platform that allows for the complete integration of all of a company’s divisions and departments.