A managed service provider (MSP) can provide critical services to any type of company in any type of industry, from healthcare providers to universities and corporate offices to mom-and-pop shops.
MSPs supply their clients with IT services, hardware, servers, security and compliance protocols, and tech support to ensure operations are continuous and efficient.
Once an MSP reaches a certain level of operational maturity, they may wonder how to scale and grow their business past the point of being a well-oiled MSP machine.
One major secret to leveling up? Becoming a value-added reseller, or VAR.
In this article, we’ll cover what value-added reselling is and how it may be a reliable source of revenue for an established MSP.
What is value-added reselling?
Quite simply, a value-added reseller (VAR) sells software and hardware that a client may find beneficial. Value-added reselling goes beyond the original scope of an agreement between MSP and client. And most often, the product or services sold by a VAR are not their own; in other words, they resell on behalf of a third-party and often with an added benefit that wouldn’t be available if the client bought directly from the third-party.
Generations ago, VARs may have sold additional office supplies to their customers. For example, VARs commonly sold copy machines on behalf of Xerox and, as an added perk, provided troubleshooting services to those customers.
Today, a VAR might sell software to their customers. Let’s use a healthcare provider as an example. Perhaps they have recently been the victims of a cybersecurity attack and are in need of the most sophisticated security software on the market, but are unable to source and implement that software themselves. They may task their existing MSP with doing so, which the MSP will sell as a value-add service on behalf of a separate cybersecurity provider. The MSP will implement, update, troubleshoot, and monitor the cybersecurity software as part of their service.
How to become a VAR
The good news is that third-party companies really like working with VARs because doing so helps distribute their product further into the market. In fact, most manufacturers rely on VARs as an important distribution channel.
Product vendors typically offer partner programs to those interested in value-added reselling. The partner program will outline requirements for becoming a partner and for remaining in good standing, which often include hitting revenue targets, participating in training programs, and selling to a minimum number of customers.
Depending on the size of an MSP and/or VAR, there are cases where a VAR will need to team up with a distribution partner who can help them source the right products and services to sell and access the necessary supply to do so.
Our recommendation is to start with existing relationships. An MSP already works with a number of vendors and it’s worth asking if they have any reseller programs in place. Starting with a product or service an MSP already knows means it’ll likely be easier to help someone else implement it and will be a solid proof of concept for adding VAR services to existing offerings.
The benefits of becoming a VAR
Successful MSPs rely on a steady stream of recurring revenue to keep them profitable. Having predictable revenue makes it easier to budget, forecast earnings, hire additional staff, bring on new customers, invest in technology, keep hardware and office spaces up-to-date, and so on.
MSPs who are ready to grow and scale may find value-added reselling appealing because they already have a healthy customer base to try it out on. The best MSPs are seen as trusted advisors by their customers who are likely to accept recommendations given by those MSPs, meaning there’s a good chance they’ll be willing to try a product or service that the MSP is reselling.
In addition to the recurring revenue that an MSP can already expect from their current customers, value-added reselling brings in even more revenue without necessarily doubling efforts.
MSPs are already providing consulting and implementation services to their customers, so adding on VAR services isn’t likely to require a big learning curve.
For customers, working with a VAR comes with many benefits:
- More in-depth assistance implementing or troubleshooting a product or service
- Additional perks that wouldn’t be available if purchasing directly from vendor
- Expertise in the customer’s specific industry
- Working with one single vendor (the MSP) makes it simpler to manage multiple technologies at once
- Best of all, the benefit of continuing to work with a trusted advisor who knows the customer’s business and goals
Becoming a VAR with airSlate
For anyone looking to become a VAR, it’s a good idea to study the market and current trends and identify what it is that companies would highly benefit from.
Currently, automation is on the table for the vast majority of organizations. No-code and low-code tools are shaping how agile, efficient, and productive organizations are, with nearly 70 percent of orgs piloting automation technologies, according to a McKinsey Global Survey.
airSlate is a document workflow automation platform that empowers anyone to create powerful documents and automate their workflows within one single platform. From editing PDFs to creating custom forms and eSigning documents, airSlate is changing the way organizations automate their processes.
Although many organizations see the need to adopt automation, they still lack the resources to make it happen. And that’s where a VAR comes in.
VARs have the opportunity to become automation experts and help their clients completely transform the way they do business. Automation will absolutely continue to influence the way we work, so this is a technology trend that will not be disappearing.
A VAR selling automation via airSlate can expect to make thousands of dollars in additional revenue every year.
airSlate partners work with a dedicated partner account manager and solution architect who guide VARs through a sales enablement process and build confidence around selling airSlate. airSlate also invests in partners by offering market development funds to those who successfully complete a selection program.