What it is:
A value-added reseller (VAR) is an entity that adds features or services to a product and resells the combination as a package.
How it works/Example:
For example, let's say Company XYZ installs accounting software, then it comes to the company's headquarters, installs the software for the company, moves over all the data from the old software package, and tests the data to make sure the import was successful. It also trains the accounting staff on how to use the new system.
As you can see, Company XYZ isn't just selling a software package. It is also selling help with converting a company to a new system.
Why it matters:
VARs are common in the technology industry because the successful use of technology involves tangible products such as hardware as well as intangible products such as software and transition work. Additionally, many customers have unique needs and situations that VARs can address.