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.
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.