IT vendors offer channel partner discounts that enable resellers to purchase products below list price. Vendor discounts vary widely and may range from 10% to 50%, depending on such variables as type of product and the volume of product the reseller is purchasing. The idea behind reseller discounts is to cover the channel partner's sales and marketing costs and leave room for profit margin.
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Increasing margin pressure has compelled many resellers to seek profit beyond the traditional product fulfillment business model. A reseller that offers services beyond order fulfillment is called a valued-added reseller (VAR). An IT VAR, for instance, may provide consulting and professional services, such as systems implementation, in addition to product resale. A software VAR, meanwhile, may provide software asset management services in addition to product fulfillment.
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