Blog August 30, 2019

Common traits of successful VARs

Value-added resellers, or VARs, play a critical role in the business world. From those that provide office supplies and materials to those that offer information technology or software solutions, the modern business sector couldn’t evolve and progress without the work of those that resell the goods and services of others. Resellers help penetrate markets in different ways, increase distribution, and fill a demand in ways that help drive the economy forward. Resellers find new ways to bundle offering and provide enhanced types of support, filling a critical need for businesses of all shapes and sizes.

However, if you own and operate a VAR then you’re likely to recognize many of the challenges inherent to your business and those like yours. For starters, being a reseller means that you have to find ways to differentiate your services else the clients can bypass you directly. After all, that’s what “value add” means in the first place. Additionally, the barrier to entry for competition can be fairly low if you don’t find ways to differentiate what you do and who you do it for.

The good news is that the best and most successful value-added resellers in any sector or market share some common traits. While finding these traits in your business’s own DNA isn’t a guarantee of success, it is a good indicator of both present and future business health. Take a look at the list below and give some consideration to how much – or how little – your business aligns with these pillars.

Successful VARs find a niche

While every value-added reseller is in a niche by the very virtue of what goods and services it chooses to resell, the most successful VARs specialize deliberately and decisively. A niche isn’t just about what you resell but also who you resell it to. Whether your niche is defined by geography, market sector, client company size, or company sector, the more specialized your organization can be, the better. Worried that your niche won’t be big enough to support your growth and revenue initiatives? The world is a big place and you can always expand your niche if you find you’ve already won every customer in a specific niche.

Some of the most successful resellers in the IT space have found a very specific corner of the business world to stand on and become the leader of that space. Following a similar path of specialization instead of generalization will put you in a position of strength. You wouldn’t hire a general practitioner for heart surgery. Rather you’d find the best cardiologist possible. Treat your reseller business the same way: find a nice.

Successful VARs find ways to provide more value to current customers

In the business world it is up to ten-times harder to find a new customer than it is to sell to an existing customer. While this axim is true to all businesses – not just resellers – it’s worth spending some time on when discussing the VAR business sector. Why? Because your existing customers are often the best, most reliable, and easiest source of new revenue. These clients are already paying for the value that you add – after all, they could bypass you directly if you weren’t providing something critical. Finding new ways to enhance whatever service you are adding to the equation means finding new ways to increase revenue. For example, if you provide managed services around infrastructure, why not find a way to offer additional security services or consulting that fits with your current niche?

You don’t necessarily need to add more products or services to your portfolio to expand your business offerings. Instead you can look for ways to incrementally increase or enhance the services you already provide to client. You might be surprised how easy the decision is for happy clients to increase their spend with you if you offer an increase in the value they receive from their relationship with your firm.

Successful VARs look for new areas opportunity as their niche evolves

“The only thing constant is change.” We’ve all heard that one as well, but when it comes to IT sector the pace of that change is extreme. Today’s technological marvel can be obsolete tomorrow and the service you offer now can go from mission-critical to superfluous in the blink of an eye. As a result, the most successful resellers are constantly looking for new ways to serve their niche. For example, many resellers in the web hosting space previously offered virtual private servers and dedicated servers as their core product, adding value by offering support and security services to end-clients. But in the last decade, the appetite for public cloud services has provided the opportunity for many of these hosting resellers to expand their service offerings.

Some of these resellers have decided to avoid offering AWS or Azure to clients, sure. But many successful VARs have added managed cloud services to their portfolio of offerings, satisfying client needs and expanding into new areas of opportunity. Be on the lookout – constantly – for market shifts, client needs, and places where additional services can fill gaps and drive your VAR business forward.

Successful VARs offer something above and beyond just the product they sell that helps them stand out

As mentioned before, by their very definition value-added resellers offer something above and beyond just the product or service they offered. But those that are most successful go above and beyond traditional convention to cut through the noise and make a big impression. For example, many small and mid-sized VARs stand out from larger competition by visiting clients and developing real rapport and relationships with customers. Other smaller VARs are active in their communities or with causes to not only help others but also put their values on display in ways that larger competitors often cannot or do not do. Others still actively blog or share content online that informs and educates others.

Standing out from the crowd means doing something different, approaching challenges with a different point of view and perspective. The possibilities are near endless, but what matters is that you develop your business in a way that makes it different than your competitors. Candidly, if you struggle to define what makes you stand out then there is a good chance that you don’t.

Successful VARs don’t get distracted by some new offering or solution

All too often businesses see a new area of opportunity as a great salvo to any sales struggles, invest heavily in that area, don’t see gains, and immediately start looking for the next-big-thing. Avoid this pitfall at all costs! While looking for new areas of opportunity and expanding your service offerings is prudent, don’t confuse that will jumping from one place to another in search of a winning formula. Serving a niche and growing from your success is a far cry different than chasing “whatever’s next” in your industry.

The problem with chasing new shiny objects isn’t just that you’re unlikely to ever develop expertise in that offering, it’s also confusing to customers and employees alike. People crave structure and stability in their business relationships. If your customers and your team are unsure that your focus will be in the same place in a few months or years, then it is highly unlikely they’ll have the confidence to trust you in the present. Keep focused on your core and grow from that instead of away from it.

Weaving the Right Thread in to your VAR

There are myriad ways to build a strong, stable, and growing reseller business. We’ve seen value-added resellers defy convention and thrive in hyper-competitive environments just as we’ve seen VARs that should be set for success scratch their heads wondering why nothing is going right. When it comes to bundling your own expertise with a resold product or service, there truly is no “one size fits all” path to success.

That said, we’ve never seen a VAR with the traits above struggle to find relevance or market fit for long. There are, in fact, best practices that won’t insure success but certainly can set you up to receive it. True, there will be other challenges along the way as there always are. But establishing the right foundation and philosophy goes a long way in pointing your ship in the right direction.

If your value-added reseller business is looking for new areas of opportunity or craving stability in service of your customers, then a partnership with Connectria makes sense. For almost two decades we have provided VAR businesses around the world with not just specialized infrastructure services but also the support and care necessary to power their own businesses forward. Together we can do amazing things – contact our Partner team now.

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