VAR
A VAR (Value-Added Reseller) is a company that resells technology products to government buyers while adding services like integration, training, or support.
What Is a VAR?
A VAR (Value-Added Reseller) is a company that purchases technology products from manufacturers or software vendors and resells them to government buyers with added value: implementation, integration, training, customization, and ongoing support.
In SLED procurement, VARs play a significant role, especially for IT hardware, networking equipment, and complex software deployments. Many government agencies prefer buying through VARs because they get a single point of contact for product, implementation, and support.
What VARs Add
| Service | What It Means |
|---|---|
| Integration | Connecting the product with existing agency systems |
| Implementation | Deploying, configuring, and testing the solution |
| Training | Teaching agency staff how to use the product |
| Support | Ongoing helpdesk, maintenance, and troubleshooting |
| Procurement navigation | Handling government purchasing requirements and contract vehicles |
VARs vs. MGAs vs. Distributors
| Type | Role | Value Add |
|---|---|---|
| VAR | Resells with services | Implementation, training, support |
| MGA | Consolidates procurement for volume | Procurement expertise, contract access |
| Distributor | Aggregates products for resellers | Logistics, fulfillment |
Working with VARs as a Vendor
- Choose VARs with government expertise. Not all resellers understand procurement rules, cooperative contracts, and compliance requirements. SLED-focused VARs are more effective.
- Provide enablement. Train your VAR partners on your product, give them demo environments, and share competitive intelligence.
- Align on pricing. VAR margins (typically 15-40%) must be built into your pricing model. Ensure your cooperative contract pricing accommodates the partner margin.
- Define territories. Clearly delineate which accounts are VAR-led and which are direct to avoid channel conflict.
Frequently Asked Questions
What is a VAR?
A VAR (Value-Added Reseller) resells technology products to government buyers while adding services like implementation, integration, training, and support.
Why do government agencies buy through VARs?
Agencies get a single point of contact for product, implementation, and support. VARs also navigate procurement requirements and contract vehicles on behalf of the agency.
What is the typical VAR margin?
VARs typically take 15-40% margin depending on the value they add. Implementation-heavy deals command higher margins than simple product resale.
How is a VAR different from an MGA?
VARs add services (integration, training, support) on top of the product. MGAs (Master Government Aggregators) focus on procurement logistics, contract access, and volume pricing without deep technical services.
Should vendors use VARs for SLED sales?
VARs are valuable for products that require implementation, customization, or local support. For simple SaaS products, direct sales or MGAs may be more efficient.