A value added reseller is a reseller who engages in a form of business in which the value of the products offered for sale are increased by adding functionality or exclusive components. By adding more value to existing products, retailers can increase the profit margin for their current product line. The value added reseller is able to enhance his product line without spending huge amounts of time and money in the development of new products. The reseller adds this value through added services, features and functions.
The thought behind this tactic is simple. Although the price of the package may be deemed 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, because he divides the total cost of the set by the number of products or services included.
In some cases, the tactic of adding value can be used to stimulate sales for a certain inventory item or professional service. Many manufacturers and service providers offer a discounted price on products or services that did not meet their projected sales. Shoppers can often find these money-saving opportunities in the form of specials. For example, an auto mechanic may offer a free tire rotation with an oil change, or a telephone company may offer a package that includes Internet, television and home phone service at a discounted price.
One common example of a product offered by a value added reseller is bundled software. While the end user may be shopping for a certain program, he may be put off by the high price tag. In many cases, retailers will package a variety of games, media or security software in a set that is then sold to the end user. The value added reseller makes this software seem like a greater value by bundling extra software with the package. The reseller can make even more of a profit, because the person looking for that one program ends up paying more for the bundle than he intended to pay for the single program.
Another common example of this sales tactic is seen in the fast food industry. When you visit many fast food restaurants, a quick look at the menu reveals the option to buy certain foods together for a discounted price. These meals usually include a sandwich, a side item and a drink offered at a small discount. As a value added reseller, the restaurant is banking on the fact that more people will order these combination packages instead of spending money on a single food or drink item. By doing so, the buyer ends up spending more on the combo than he perhaps intended to spend by buying just a sandwich.