Resellers reshape the IT supply chain with added value and regional reach

Resellers are transforming the IT industry by streamlining procurement, offering value-added services, and expanding market reach through innovative models like VARs and online platforms, boosting efficiency for vendors and SMEs alike.

In the information technology (IT) sector, resellers serve as crucial intermediaries that purchase products or services from manufacturers, vendors, or distributors and then offer them to customers. These transactions occur within both business-to-business (B2B) and business-to-consumer (B2C) frameworks. Resellers play a pivotal role in the IT supply chain by streamlining procurement processes, enabling better pricing structures, and providing supplementary services that enhance customer experience.

One of the primary advantages of resellers is their ability to simplify procurement. Rather than businesses managing numerous vendor relationships for hardware, software, and cloud solutions, resellers often consolidate these products into a single convenient purchase point. Additionally, resellers manage logistics such as product sourcing, order processing, billing, and delivery, thus alleviating the operational burden on buyers. Their capacity to negotiate bulk purchase discounts and vendor-specific incentives allows resellers to pass along competitive pricing to customers, particularly benefiting small and midsize enterprises seeking both convenience and consultative guidance.

Resellers typically operate within vendor or distributor partner programs, which offer tiered discounts based on purchase volume and partnership status, along with deal registration protections and performance incentives. Vendors may also provide marketing support and technical training to resellers, allowing them to become knowledgeable advocates for the products they offer. Financially, resellers profit by acquiring goods at discounted rates and selling them at a markup, while often assuming responsibilities for customer support and order fulfilment.

Among the various types of resellers, Value-Added Resellers (VARs) are particularly notable. VARs enhance core products by adding services such as installation, configuration, training, and consulting, thereby delivering turnkey solutions. For example, in enterprise IT or cybersecurity, VARs might bundle networking equipment with bespoke integration or provide licensing and asset management for software products. Other reseller models include Direct Market Resellers (DMRs), which operate primarily online or via phone sales without physical stores, focusing on high-volume, low-margin sales; web hosting resellers who purchase server resources to rebrand and resell; and Virtual Internet Service Providers (VISPs), which deliver internet services using infrastructure from larger ISPs, often serving niche or underserved markets.

Industries relying heavily on resellers span across enterprise software, cybersecurity, cloud services, IT hardware, and telecommunications. Large software companies such as Microsoft, Adobe, and IBM depend on reseller networks to reach a broad spectrum of customers, including SMBs. Similarly, cybersecurity firms like Fortinet and Palo Alto Networks utilise VARs to implement and support their security solutions. Cloud providers, including AWS, Google Cloud, and Microsoft Azure, frequently partner with resellers to assist clients with onboarding and managing cloud deployments. The reseller model also allows smaller ISPs to extend their reach into regional and rural areas through reseller partnerships.

It is important to distinguish resellers from other channel participants such as distributors and dealers. While distributors purchase large volumes of products from manufacturers and supply them to resellers or dealers, resellers typically sell directly to end users, sometimes adding services or integration. Dealers are usually smaller retail-oriented entities selling directly to consumers, often in physical locations. Many resellers collaborate closely with distributors to access broader product inventories and more favourable pricing, facilitating a more efficient channel ecosystem.

Beyond the pure IT context, the concept of reselling extends into other domains, including the apparel resale market, which has seen significant growth in recent years. Historically, reselling activities have long been part of trade, dating back to the Middle Ages with secondhand goods being widely circulated.

Overall, resellers represent a fundamental element in the indirect sales channel of the IT industry, enabling manufacturers and vendors to expand their market reach efficiently while providing end users with value-added services and simplified procurement options.

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Source: Noah Wire Services