Value Added Reseller, VAR

A class of authorized distributor or reseller who is allowed to modify or combine a supplier’s technology with its own or third-party products (adding value) before reselling the product. VARs can be “pure VARs” i.e., they can only resell the supplied goods after they have added value, or less frequently, they may also have distribution rights to sell or distribute the subject goods without adding value.

VARs usually get wholesale goods at a deeper discount than an ordinary distributor for this reason where VARs and standard distribution channels exist, it is important to prevent the VARs from reselling bare goods, i.e., goods without added value, which have been wholesaled to the VAR at the VAR price, since this would prove unfair to normal distributors. However, competition law may affect the manner in which VARs’ reselling rights may be restricted and therefore mixed VAR/Distributor arrangements need to be approached with caution. See Channel Conflict.

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