Table of Content
- How Distributors can help VARs expand their Business?
- Sell a Diverse Product Range
- Amplify your Business Reach through Collaborative Marketing
- Streamlined Business Operations
- Technical Support and Training
- Enhanced Customer Relationships
- Navigating Market Challenges
- Credit and Financial Assistance
- Conclusion
Distributors are an indispensable part of the supply chain that acts as an intermediary between the manufacturers and the value-added resellers (VARs). To meet the growing expectations of their customers, VARs heavily rely on distributors that provide a wide range of products for their channel partners. VAR business model cannot work effectively if it is not connected to appropriate distributors and channel partners.
Key Takeaways:
- Strategic distributor partnerships enable VARs to convert rising demand for customized solutions into profitable growth while riding a VAR market expected to grow at 11.6% CAGR from 2024 to 2031.
- Multi-vendor distributors with broad portfolios let VARs diversify beyond core IT lines into categories like office supplies and equipment, increasing average deal size and customer retention.
- Co-marketing programs where distributors share branded and localized content help VARs penetrate new countries faster without bearing full creative and translation costs.
- Distributor dropshipping, product training, and escalation support together shift VARs away from logistical firefighting toward higher-value activities like solution design and relationship building.
- Flexible financing and Net 90 terms from distributors give cash-limited VARs the working capital needed to scale operations and invest in new growth opportunities without crippling cash flow.
VAR businesses are witnessing significant growth as the demand for customized solutions increases. Their market is expected to grow a CAGR of 11.6% from 2024-2031. If you are a value-added reseller looking to grow your business, you should work closely with your distributors and leverage their expertise.
How Distributors can help VARs expand their Business?
Sell a Diverse Product Range
To open your business to different market segments and attract new customers, you need to connect with distributors that have a diverse product portfolio. Distributors that have business partnerships with multiple manufactures will allow you to sell a variety of products and appeal to different customer segments.
In case you are selling only IT products, partnering with a distributor like Ingram Micro will enable you to sell office supplies and equipment as well, and expand your business to new markets. Diverse product offerings will allow you to fulfill a wider range of customer requirements and increase your revenue.
Amplify your Business Reach through Collaborative Marketing
To enhance your business reach, you can also collaborate with distributors for marketing and support. Co-branding and co-marketing initiatives can help to amplify your marketing efforts and play a crucial role in expanding your business to new geographical regions. Joint marketing campaigns can yield better outcomes.
Distributors can share branding material like brochures, case studies, and whitepapers, which you can use to boost your marketing efforts.
When expanding your VAR business to new countries, you are likely to face obstacles due to linguistic constraints. You cannot use the same marketing material as it does not speak your consumers’ local language. In such circumstances, distributors working on a global scale can provide translated versions of their marketing material, making it easy to enter new markets.
Streamlined Business Operations
Distributors that have strategic partners with VARs provide dropshipping services. As a value-added reseller, you don’t have to manage physical inventory or deal with packing and shipping products. This eliminates logistics issues and streamlines your business operations, enabling you to focus on strategies that help you to grow and expand your VAR business.
Pro Tip:
When choosing distributors, prioritize partners that can simultaneously offer multi-category catalogs, co-marketing assets, and structured training programs so your team gains product depth, marketing leverage, and operational support from a single relationship.
Technical Support and Training
Distributors offer comprehensive training programs to enable reseller partners to better understand their products. With this product training, VARs are knowledgeable about the specifications, features, and benefits of the products they are selling. This allows VARs to better assist their customers, gain customer trust and confidence, leading to increased sales opportunities.
Enhanced Customer Relationships
Distributors can help and play a key in improving your customer service which will enable you to differentiate your VAR business from other VARs. They can assist you in providing value-added services like configuration, integration, and pre-sales support. This will allow you to stand out from the competition and expand your business. These services can assist you in providing comprehensive solutions tailored to your client’s individual needs.
Distributors can escalate problems and speed settlements when necessary because they frequently have established contacts with manufacturers. This degree of assistance improves the clientele’s entire experience and encourages repeat business and steadfast loyalty.
Navigating Market Challenges
The ever-changing technological landscape offers VARs both opportunities and challenges. Because of their knowledge of market trends, industry innovations, and strategic advice, distributors can help VARs overcome these obstacles and grow their business.
Distributors provide the knowledge and assets required to remain competitive. Whether it’s assessing the effects of new regulations, responding to changing consumer preferences or introducing cutting-edge technology. VARs can proactively handle market challenges and capture new opportunities for growth by forming partnerships with competent distributors.
Credit and Financial Assistance
Being a low-margin business, distributors are aware of the financial difficulties faced by many VARs. To improve their cash flow, distributors provide different financing options and flexible payment terms.
Many times, distributors offer Net 90 payment terms, which gives VARs the flexibility to pay invoices within 90 calendar days from the invoice date. Due to this extended periods of time, VARs don’t have to make large upfront payments. They can plan and manage their finances more efficiently. This allows them to scale their business operations without have to handle their financial stress. By leveraging financial assistance, VARs can invest in new opportunities and technologies for business growth.
Pro Tip:
Use distributor credit lines and extended terms as a planned growth lever by tying their usage to clear inventory, margin, and cash-flow thresholds instead of treating them as an open-ended source of cheap money.
Conclusion
Distributors play a vital and diverse role in the growth of VAR business. They are essential to the success of VARs because they give access to a wide range of products, streamline supply chain operations, and provide technical support, marketing help, and financial aid. By leveraging the distributors’ expertise and resources, VARs can augment their competencies, provide clients with exceptional value, and expand their business in a fiercely competitive industry. The alliance between VARs and distributors is necessary to succeed for both parties as the technology landscape changes, spurring innovation and expansion within the sector.
