What is a value-added reseller?

Electronics stores may offer exclusive services, features or functions as an incentive to buy from them.

A value-added reseller is one that engages in a form of business in which the value of products offered for sale is increased by the addition of unique functionality or components. By adding more value to existing products, retailers can increase the profit margin of their current product line. The value-added reseller is able to improve their product line without spending a lot of time and money on new product development. The reseller adds this value through bundled services, features and functions.

The thinking behind this tactic is simple. While the package price may be considered expensive for a single part, adding more components creates greater value. The additional programs offered by the value-added reseller allow the end user to justify the purchase as he divides the total cost of the package by the quantity of products or services included.

In some cases, the value-adding tactic can be used to stimulate sales of a particular inventory item or professional service. Many manufacturers and service providers offer a discounted price on products or services that have not met projected sales. Customers can often find these opportunities to save money in the form of special offers. For example, an auto mechanic might offer a free tire rotation with an oil change, or a telephone company might offer a package that includes Internet, television, and home phone service at a discounted price.

A common example of a product offered by a value-added reseller is the software package. Although the end user may be buying a certain program, they may be put off by the high price. In many cases, retailers bundle a variety of games, media, or security software in a bundle that is sold to the end user. The value-added reseller makes this software appear to be of greater value by adding extra software to the package. The reseller can profit even more, because the person looking for that program ends up paying more for the package than they intended to pay for the single program.

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Another common example of this sales tactic is seen in the fast food industry. When you visit many fast food restaurants, a quick glance at the menu reveals the option to buy certain foods together at a discounted price. These meals usually include a sandwich, a side dish and a drink at a small discount. As a value-added reseller, the restaurant is banking on the fact that more people will order these combo packs rather than spending money on a single food or beverage. In doing so, the shopper ends up spending more on the combo than they might have intended to buy just one sandwich.

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