Var Agreement Definition

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. This term is often used in the computer industry, where a company buys computer components and builds (for example.B.) a fully functional PC system, normally suitable for a specific task (e.g.B. non-linear video editing). The company thus has an added value above the cost of each it component. Customers would purchase the system from the dealer if they do not have the time or experience to assemble the system themselves. [Citation required] Tandy Corporation was an example of a company selling products via VARs using re-labeled versions of its computers.

[2] [3] Value-added resellers play an important and prominent role in the information technology sector. This site is protected by reCAPTCHA and Google`s privacy rules and terms of use apply. An information technology company recognizes the usefulness of value-added resellers and generally offers product discounts to increase their revenue through this channel. Some of these resellers may be exclusive to a business, but most carry a few or more brands to offer more choice to customers. Value added can result from professional services such as integration, customization, consulting, training and implementation. The value can also be developed by developing a specific application for the product to meet the customer`s needs, which will then be resold as a new package. VARs integrate platform software into their own software packages. [1] Value-added resellers cannot really control the cost of the product they sell, and the entire resale process is sometimes not transparent. Sometimes manufacturers will try to mitigate this problem by offering resellers a discount that will allow a reseller to better control the prices it charges its customers. The email address cannot be subscribed. Please, do it again. 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.

This is why successful VARs are looking for ways to use a recurring source of revenue that offers them, month after month, guaranteed sales for the duration of a customer contract – usually annual or multi-year. These VARs will move to a more enderarter Managed Service Provider or MSP role. Items purchased by VAR can be individual computer components that are resold to companies for installation in existing systems, or complete desktop or laptop computers on which var installs custom software that they have created based on their expertise and the specific needs of its customers.