IT Vendor VAR Relationships 101

I guess I’ve been in the VAR business so long it surprises me when we run across customers that really are clueless as to how the whole process works and the value of underlying relationships. I shouldn’t be surprised- only a relative handful have really mastered the customer -> vendor/VAR -> distributor -> manufacturer relationship. The rest have no clue.

So, if you’re in ‘the rest’ category, here’s a quick overview of how the chain of love works top-down from manufacturers to VARs to you.

Manufacturer -> Reseller.
First it’s important to note that most IT Manufacturers have some level of Partner Programs. These programs are structured agreements between a Reseller and the Manufacturer and are usually based on 1) volume of their product sold and/or 2) technical expertise. Each Manufacturer is different, but they usually offer 2-4 tiers of partner programs depending on those 2 things, and each tier may have a different discount offered to the Reseller.

Commodity items may just require a Reseller to request to be in the Partner Program, and sign a couple of documents. More involved products, such as the network and security products we deal with, usually require the Reseller to demonstrate competencies and a high level of technical expertise with that product. Some product lines or specific products may require a Reseller to have authorization or certification to sell and/or provide services for a product.

When selecting a Reseller or VAR, it’s important to keep these things in mind and be sure your choice is comfortable with that product line- you should be able to ask them for recommendations and help specifying the correct products and possibly help with the installation and integration. If you send a Reseller a list of part numbers and it’s the wrong ‘stuff’- you’re less likely to get help exchanging it for the correct items, from the Reseller or Manufacturer. It’s also nice to know you have a friend to lean on when you’re installing new products.

You’ll see more info from me on understanding the difference between a Reseller and a VAR soon. Your VAR should be able to help every step along the way, and a Reseller should at least be able to help you select the correct part numbers as part of their pre-sales support.

Distributor -> Reseller
There’s another interesting twist in our chain of IT relationships- the Distributor, or Disti for short. Understanding distribution of a product can be advantageous- some products are sold directly from the Manufacturer to Reseller, but most go through a Disti. The Disti can be another advantage for your Reseller to leverage, but the Customer really should not be involved in any way in these transactions. Sometimes Distis offer an additional discount to a specific product line or type. Other times the Distis may be offering a volume discount or bundles. Sometimes the incentives are for the Reseller, and some times they’re designed to pass through to the Customer. It’s a good idea to just ask your Reseller if there are any additional discounts that could be applied.

Reseller -> Customer
A lot of Customers like to get information directly from the horse’s mouth and at times this Reseller-Customer relationship is bypassed at critical times. Keep in mind the Manufacturer sales rep is most interested in selling you something- and they may be interested in selling you a specific something, depending on what their incentives are. If you, as the Customer, call in a Manufacturer directly for pre-sales support, do you really expect them to honestly tell you “Hey Mr Customer, you really don’t need my widget.”? On the other hand, if you call in a trusted Reseller or VAR, they have a more vested interest in your success, and the success of whatever solution is put in place because they’re responsible for making sure it all works.

Another distinct advantage of a good Reseller/VAR -> Customer relationship is the ability to leverage your Reseller’s relationship with the Manufacturer. Maybe you’re a huge buyer of the Manufacturer’s stuff- and maybe you have enough clout with them directly to get what you want. Congratulations if you’re in that position, but for 99% of Customers, that’s not the case. If your Reseller or VAR is in good standing and either moves a large volume or has extensive technical expertise, they can offer you some great advantages, in pricing, services and more. Your VAR can frequently negotiate additional discounts, maybe free training or reduced service costs and competitive trade-ups.

Another tip- don’t discount smaller Resellers. Our company, for example, is not an International online box-pusher, but we have the best pricing tier with most or all of our Manufacturer partners and offer the majority of our product lines at less than you’ll find from those online e-tailers and wholesalers. Surprise!

That’s a very brief overview- you’ll see more on Vendor-VAR relationships coming soon.

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