Drop shipping essentially relieves an entrepreneur from the burden of packaging and transportation. Finding the right Drop shipping suppliers is critical for the success of a business. In this article, we will have a comprehensive look at how VAR can enter into drop shipping market?

What is Drop shipping Market?

Drop shipping business model can provide high profits with little or no investment at all. It is a supply chain management model in which the onus of maintaining an inventory and delivery is on the suppliers, manufacturers or wholesalers. In drop shipping model, when a store or an online platform sells a product, it then purchases the product from a third party such as a wholesaler or a manufacturer who then directly deliver it to the customer. Thus, the retailer or the e-commerce platform at any point of time does not come in contact with the product.

The unique model thus requires little capital as the need for maintaining an inventory is eliminated and hence the business becomes easy to start. The overhead expenses also decrease significantly due to this business model. Other advantages of the same include increased flexibility, scalability and broad product portfolio.

What is VAR IT Hardware & Software?

A value-added reseller (VAR) typically buys products from a supplier, then as the name suggests add value to the product in the form of features and services and then resells the entire package as a form of customization to the end users. This feature of adding value is what attracts a lot of customers to VAR. The channel is popular mostly among B2B consumers. For example, software VAR will first purchase software, add some new features to it and then will sell the packaged solution to the client, thus essentially adding value to the original package.

VARs often possess expertise in certain specific markets. They offer their customers, consultation and assessment services pertaining to these specific markets. The whole offering is aimed at helping customers to assess and discover their needs. In the next step, Value-added resellers offer solutions addressing these needs.

How VAR can Start Work with Dropship Market?

Value-added resellers can easily work within the dropship market. In fact, they can reap huge benefits out of the market. VARs usually serve a niche market which proves beneficial while operating in a dropship market as niche operations can lead to higher revenues.

The solutions or products provided by VARs are complex and require extensive marketing efforts. Moreover, they can better market these products as they do not have to carry out other tasks such as inventory maintenance. Hence, Tie-ups with VAR may prove beneficial in the drop ship market.

Drop shipping market generally operates on low profitability. However, the case is opposite in the case of VARs. These resellers generally possess expertise in the products that they deal with and hence can offer customization at a larger scale. Thus, they can charge a high value to garner maximum profits.

There are many IT and hardware dropship wholesalers operating in the market. These wholesalers provide their customers with solutions for laptops, computer, desktops, cell phones, etc and that too for a wide variety of brands. They also provide with different dropship plans to attract a wide variety of clients.

How to Choose the best Drop shipper for VAR? (IT hardware & software)

Let’s discuss the factors to be considered to select the right Drop Shipper for VAR.

• Number of years of experience

In the long run, the experience is a major distinguishing factor among peers. Veterans should be chosen over novice ones because they have the sources as well as the ability to deal with any situation and contingencies. Also, they have a sound understanding of the functioning of the industry as well.

• Shipping reach

If you are planning to target a wide geographical area, this is one of the critical points to be taken care of. Suppliers have a limitation with regards to their shipping capabilities and hence these capabilities should be thoroughly checked in order to determine whether they are compatible with a company’s objectives.

• Fees

Per order fee should be checked and evaluated and care should be taken to ensure that these fees are not exorbitant. Also, a company charges fees for account set up and has different prices for different plans. So, choose the best possible plan that is in line with your budget.

• Quality of delivery

IT should be ensured that the drop shipper has proper quality checks to ensure that the customer gets quality products. This point is particularly important as the bad quality of delivery may damage the company reputation.

• Warranty

One should check if the drop shipper provides the warranty of the product as this ensures that the product will work in the same way as advertised. This factor is essential for the credibility of the product.

Benefits of VAR & Dropship Market (Supplier)

• Low overhead costs

Both drop ship market and VAR result in low overhead costs as in case of VAR, you just have to sell products by repackaging products or services which are already competent in the market.

• Margins can be defined exclusively

The risk of purchasing a product that is hard to sell is eliminated when working with a VAR & dropship market. Also, the level of customization offered by VARs makes it easier to define higher margins.

• Greater upselling prospects

Once you find a right drop shipper, upselling becomes comparatively easy as you get to know what value to add to a particular product, to increase its overall saleability and price.

• Flexibility

You can almost operate your business from anywhere as the need for inventory is eliminated. In the case of VARs, they do not need to sell or operate in a particular domain and can sell a wide variety of products thus increasing flexibility.

To conclude, it can be safe to assume that value-added resellers can claim huge benefits in the drop shipping market as the characteristics of both are complementary to each other.

Learn more about Drop Shipping Business

• What is Dropshipping? The Ultimate Guide to Dropshipping
• Drop Shipping Business: How to Start & Find Drop Shipping Wholesalers