The Retail tech market and Direct channel vs. VARs (Value Added Resellers)

The basics

Why does a Retail Technology Vendor/Solution-provider have VARs?

Because so it can save precious resources.
Customer acquisition (in a word, SELLING) is very difficult in the retail tech market mainly because:

  • it has very long sales-cycles – that is, it’s very, very time consuming and expensive
  • it doesn’t scale – to sell more, you need more Sales-people

Additionally, VARs are employed especially where geography is an issue (foreign Customers) and when some special, segment-knowledge is needed (jewelers and book-stores, for instance, have specific processes; no process knowledge? …no joy…!).

VARs have a big role also when we talk about maintenance, to support Customers in their day-by-day activities – for example helpdesk, etc. These are expensive, time-consuming activities that do not make anybody rich.

By the way, traditionally Retail Tech Vendors do both Direct and VARs:

  • VARs are for small Customers/foreign Customers/Customers with special needs
  • Direct is reserved to BIG Customer/local Customers

 

Vendors choosing VARs, VARs choosing Vendors

What are the elements that Retail Tech Vendors consider when they choose VARs to partner with?

  • their ability to sell
  • their ability to gather feedback from Customers and share it back with the Vendor
  • their ability to offer qualitative support/helpdesk/maintenance
  • any specific/local/”territorial” knowledge

What are the elements that VARs consider when they choose Retail Tech Vendors to partner with?

  • attractive revenue-sharing agreement
  • Vendor stability
  • quality of the solution (competitive, reliable, future-proof, etc.)
  • training and support available to VARs, technical documentation, etc.
  • opportunity to cross-sell additional services, add new functionalities (add-ons), offer consulting, etc.

Andy Cavallini  –  http://retaildom.com

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