Value-Added Reseller (VAR)

A value-added reseller (VAR) purchases a vendor's product, layers on its own services such as configuration, support, training, or complementary software, and sells the combined offering to end customers under a single price. The "value added" is what separates a VAR from a plain reseller: instead of moving the product unchanged, the VAR packages it into a more complete solution. VARs are a core part of channel sales, where a vendor reaches buyers through partners rather than a direct field team.

VARs typically buy at a discount and keep the margin between their cost and the bundle price, which contrasts with a referral partner who simply passes a lead and is paid a commission. Vendors govern VAR relationships through partner relationship management systems and often fund their activity with marketing development funds. A VAR sits on the indirect channel and frequently competes for the same accounts a vendor might otherwise reach directly.

When a vendor wants to reward partners for sourced revenue rather than resold margin, it can track those partners as commissioned referrers instead of resellers. In that model the relationship looks more like performance marketing: the partner is paid a revenue share or cost-per-sale on attributed deals, which is simpler to operate than a discount-and-resell VAR contract.