Maximizing the Potential of Value-added Resale Services in IT and Manufacturing

It's always interesting when you notice a shift in how services are offered. A decade or more ago, there was a strong shift toward online services, something completely different from what had always been deemed good service, typically in-person and physical one-on-one communication. 

Now, value-added resale services are at their peak, bringing many opportunities to original equipment manufacturers and end users. As with anything new, it is crucial that the business using the service and the end users do so most properly and advantageously. One niche within the value-added resale services industry benefits greatly from the service, namely the networking and telecommunications industries.

This article ends by shedding light on what you need to know to understand value-added resale services, the markets and industries that use them most, and some of the most significant benefits and challenges they present, both from the manufacturer's and the end-users perspectives. It then looks at the expanding market for these services.

Understanding Value-Added Resale Services

Right, first things first, it's time to understand what value-added resale services are. Don't allow yourself to be confused with the term resale, as you might initially think that this means that it is always a secondhand or thirdhand product being sold. You should not be confused between a value-added resale service and resellers. 

Resellers are individuals or companies who typically take products from users or companies who have already used the product and then resell these as they are (no adjustments made) to the subsequent end-user. However, regarding value-added resale services, it's not just about reselling; it's about adding, hence, the word value added.

Now, if you really want to understand this, you should break this word apart. The whole point of a value-added resale service is to add value. That's the first thing you need to understand: the products you purchase that have undergone a value-added service will be more enhanced than how you would have initially bought them at the manufacturer. Then, they typically resell this product from the original manufacturer, as they needed to add certain bits. These bits usually come in the form of features and tools used to enhance the product.

The interesting thing about value-added resale services is that original manufacturers enjoy collaborating with companies offering these services and enhancing their products. This means that the value-added resale service company might purchase the product from the original manufacturer and add some fine-tuning that the original manufacturer doesn't have the expertise, bandwidth or knowledge to do. However, the original manufacturer still makes the sale, and the value-added resale service finds users who want more for their bucks. 

If this is unclear, then it's best to use an example. Think about a laptop you might have bought from an Apple Store or a Samsung store. Say you're deeply invested in, and you typically enjoy the laptops from either of these companies; however, you need more storage, need a speedier interface, want to custom build the keypad, you might want to rearrange the look and feel of the outer shell of the laptop and the list goes on. This is where a value-added resale service provider would come in. They would take this laptop, make the necessary changes, and then resell this item at a higher price, as they put work into it,t but you get exactly the product you wanted.

Another good example is cars. If you've ever seen a Fast and Furious movie, you'll notice that many cars do not look how they come from a dealership. This is because they were often at a mechanic who offered a value-added resale service by adding mags, a lower trim, or a different coat of paint, and then, the end-user bought it from the mechanic instead. Sometimes, the really talented ones can make a four-door into a two-door. It really depends, but either way, this is what a value-added resale service would be.

Markets That Use VAR Services Most

It's interesting to consider the markets that use the services most, as this gives you better insight into the end user and the original manufacturer. The top few markets that use VAR services are typically large corporations that use many products, such as the telecommunication and networking industry, the IT industry, the manufacturing industry, and the car industry.

Touching, for example, on large corporations, you might think, 'Why would large corporations use VAR services?'. This is because they have a massive amount of products that they need to dispose of, but they need to dispose of them efficiently and sustainably. Take, for example, a large company that has 4000 employees. 

Each employee needs to be kitted out with the correct item product. Half of these individuals were given a laptop while working on a hybrid schedule. After three years, the computer would need to be replaced due to company policy, but what do you do with all these laptops? You now sit with 2000 laptops in pretty good condition that you paid full price for as a company; you know you need to save for the following 2000 new laptops you need to buy for your employees, so what do you do? This is where using a value-added service company would come in handy. You could search for where to sell used laptops and then find a VR service that purchases your laptops, amends and tweaks some of the features and tools to make them more in line with either current times or in line with a company that they may be privately working with, therefore, allowing you to sell laptops in bulk and also taking advantage of the service of expertise through the VAR company.

The above is a good example of where VAR services come in handy. However, they also come in handy in the IT, telecommunications, networking, manufacturing, and car industries. There are a lot of people who work in IT who need something more than just the general service and tools that you can receive from a computer or laptop store. Therefore, by sourcing your IT material from a value-added reseller, you're able to get a more bespoke and tailor-made product that will benefit you. 

Also, the manufacturing industry is typically a good source of VAR services, as a lot of manufacturers who create things in bulk don't have the workforce or the expertise to tinker on some of the products to make them more bespoke, therefore, a lot of manufacturing companies work alongside VR services to ensure that they end-users receive the product that they truly want. The same goes for kind industries, as mentioned in the example above, whereby many end users with the budget for it don't want to use an automobile or motorbike that comes straight from the dealership. They want to wrap things up, tweak certain things and add certain functions, which is where a value-added resale service would come in handy, as the dealership wouldn't be able to sell something like this.

Benefits and Challenges Presented with VAR Services

Value-added resale services have specific benefits and challenges, which differ depending on whether they are considered from the perspective of the original manufacturer or the end user.

Starting with the original manufacturer's stance, one benefit that comes alongside value-added resale services is that manufacturers can collaborate with the service providers to ensure that their customers receive the ideal solution. You might have noticed that when you purchase a laptop, for example, if you want to add specific features, the company will not allow you to do this, as it goes beyond what they can work alongside. However, you might note that a function typically will enable you to pay additional fees for these changes and upgrades – this is usually where a value-added reseller working alongside the original manufacturer will come into play. The benefit is that the original manufacturer has essentially done the research work for the end-user, created a trusted and reputable partnership with the value-added reseller, and, therefore, gives the end-user the ideal product.

However, a big challenge for original manufacturers is that many value-added resellers can often become competitors. You see if, as a manufacturer, you're unable to live up to the expectations of your end-user. Still, the value-added resale is, it's only logical that eventually, your business will slowly start to reduce in sales and turnover, and the sales and turnover of the value-added reseller will increase.

For the end-user, a massive benefit, which has already been touched and slightly above, is that you get precisely what you want. A value-added reseller can do this if you want a laptop with X and Y features or a car with X and Y features. However, on the flip side, it also comes with a price tag. This is often overlooked as it's hard to determine what the value-added resale service will come to. If you want something bespoke, you'll have to be able to fork out a bit of your budget for it. Therefore, one of the challenges is that it can be a burden to your pocket when you're looking to hire a value-added resale service. Also, another challenge is the fact that if you do not go through the original manufacturer, you risk using a value-added resell service that isn't as reputable or authoritative as you might have imagined. If you want to add value to a product, you must only sign up with companies that have been around for a long time to add this service.

The Expanding Market for VARs

The reason that the market for value-added resale services is expanding is because companies and users have far greater demand than they've ever had before. Gone are the days of being happy with what you have; now, you want to make every product bespoke. Just think about the phone or the laptop right beside you. There were 4 or 5 different colors that you could choose from, and you are constantly changing your wallpaper to suit your current aesthetic, which is in line with the type of changes you might want from a VAR service provider. Buying something off the shelf and leaving it as is is something popular more than a decade ago. Now, you just want to be able to use the product most suitably for your personal preferences, and original manufacturers want to ensure that the added features and services on their products align with their customers' most significant needs.

It will be interesting to see the market in the next decade. Will VAR services be as demanded as they are today? One crucial aspect that may impact the VAR service industry is artificial intelligence and virtual reality. Many technological developments that naturally change the services people use today are coming up. Seeing as VAR services are something people use today, it will be interesting to see whether or not artificial intelligence has a positive or a negative impact on the services. As you know, with artificial intelligence, you can tweak and amend a lot of your things, and AI typically learns whilst on the go; therefore, if a computer has AI integrated into it and it's able to change the interface and customize the services, features and tools on the laptop as the user navigates it, then perhaps the services of VAR's will slowly fall away? It's hard to tell how this market will develop, but it will be interesting to observe, as only time will tell. 

Well, there you have it; these are the most critical aspects you need to understand about value-added resale services. Interestingly, these services are more prevalent in the IT, telecommunications, networking, automobile and manufacturing industries. Now that you know more about value-added resale services, is this something that you want to partake in when it comes to your business or when it comes to you as an end user? It's an interesting thought to mull over.

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