Vendor or VAR: which is the right choice for you?

When looking at purchasing retail technology, you can work directly with a vendor, or you can work with a Value-Added-Reseller (VAR).  Let’s look at the example of point of sale software.  There are many vendors who are selling a cloud POS solution that you can buy directly from the vendor.  But you also have the option of buying this same product from a VAR.  Which is the right choice for your business?  Let’s look at a few things you might want to consider:

1. Pricing

For many years there were complicated server-based on premise solutions that required you to purchase through a VAR because they were complicated to implement and maintain. There has been a significant shift in the industry toward cloud-based software that does not require the advanced technical knowledge of the past.  When this shift happened, software vendors started offering direct sales of their products to end users.  Does this method mean I’m saving money on the purchase of their software?  No.  If you buy the product from a VAR, you pay the same price that you would with the vendor, and the vendor will give the VAR a small commission on the sale.  Some vendors give the VAR the choice of selling the product as an affiliate – meaning no support after the sale, or selling the software as a reseller – meaning you will receive support from the reseller rather than the vendor after the sale.

2. Advanced Support

If you choose to purchase software directly from the vendor, they will most-likely have some type of support for you if you run into a problem.  Some vendors offer free support and some vendors are charging for their support.  This is where working with the vendor versus a VAR takes a different path.  Vendor support is there to make sure the software is functioning the way it is intended, and if it isn’t, they will fix it.  But what happens if you’re trying to accomplish something in your business with this software and you’re not able to figure it out on the surface?  A VAR can offer more choices and advise you on the impacts of each choice.

What if you would like to customize your software to add a certain feature or functionality?  A VAR can do development work for you to make your software really sing for you.  And many times they can import or export things like customer lists for you which vendor support typically does not offer.

A VAR can also offer support on how all of your retail technology works together.  For example, how do you get your POS system to work with your ecommerce system?  And how do both of these work with your accounting system?  Your VAR has a higher level of understanding on how to make these integrations work seamlessly.

And how does all of this software work with your hardware?  Good question!  Sometimes it’s not just plug-and-play with retail technology.  Barcode scanners need to be programmed correctly.  Credit card readers need attention.  Receipt printers have needs too.  The VAR has worked with all of this technology and can make sure everyone plays nicely together!

Another feature of working with a good point of sale VAR is the ability to assist with network issues. Am I PCI-compliant?  Is my data being backed up on a consistent basis? What happens if my internet goes down, I have lost files or worse yet, I’ve been hacked?  Your VAR is an invaluable resource for all of these network-related issues.  You might have another vendor that works with you on your network, but it’s nice to be able to make one call to a VAR that can handle all of your advanced support needs.

3.  Consultation

An added feature that you don’t find with a software vendor is the ability to provide consultative services for you.  What are the industry best practices that you should be using in your business?  Don’t expect your online chat source to be informed on anything other than the software.  What has worked well or not worked out for other retailers?  How do I set up a loyalty program?  How do I handle drop-shipping?  What are the most important reports I should be relying on to make the best decisions?  Are there any trends that I should be following in retail?  How can I enable my employees to be more effective?  How can make sure my business is safe and compliant so we don’t suffer from a security breach?

There are a wide range of topics that a vendor is not going to offer advice for that a VAR can help with. You might not need these services right away during implementation of a new system, but once you’re up and running you might want to explore some of these with your VAR.

4. ExperienceA VAR is an industry professional who has seen many things throughout the years.  It saves time to work with someone who understands retail instead of having to research each piece of the pie.  Take advantage of all of the past implementations, support issues and quirks that your retail VAR has been through before. Many times the support you receive from the vendor will not have anywhere near the amount of experience they might need to solve a problem.  It’s nice to be able to work with someone who is consultative, responsive and builds a relationship with you – someone who genuinely likes to help people solve problems.    Oftentimes a VAR is a small business owner just like you. It’s nice to know that your business is supporting another small business.  Over time you will have the security of knowing that you have a “go-to guy” who is looking out for your best interests.  And once you have this relationship, you can go back to doing what you do best – running your business!

Vendor or VAR: which is right for you?

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