What is a reseller?

In IT procurement, businesses often face a dizzying array of products and services. Navigating this landscape can be a complex and time-consuming endeavor. This is where IT resellers come in, acting as a crucial intermediary between the technology creators and the end-users. But what exactly is a reseller, and what role do they play in the IT ecosystem?

An IT reseller is a company that purchases IT products or services from manufacturers, distributors, or wholesalers and then sells them to customers. They are a fundamental component of the "channel," a network of organizations that work together to bring technology from the vendor to the end customer.

This model provides a win-win situation: manufacturers expand their market reach without having to build out extensive sales teams, while customers gain a knowledgeable partner to help them navigate their technology needs.

What do resellers do, and why is that important?

At its core, a reseller simplifies the process of acquiring technology. Instead of a business having to source multiple components from various manufacturers, they can go through a single reseller, streamlining procurement and order processing. However, the value of a reseller, especially a Value-Added Reseller (VAR), extends far beyond basic order fulfillment. VARs add significant value to the products they sell in a variety of ways.

They frequently bundle hardware and software to create tailored “turnkey” solutions that address the specific needs of a business, sometimes integrating new systems with a company’s existing legacy infrastructure. Resellers also bring deep product knowledge, offering expert advice to ensure businesses make informed purchasing decisions, and many provide essential services such as installation, user training, and ongoing technical support. By leveraging their purchasing power, resellers can often secure better pricing on products than a single business could on its own, passing those savings on to the customer.

Additionally, many resellers offer specialized services, such as network security solutions to protect businesses from cyber threats, and license optimization to help clients maximize their software investments.

Top IT resellers in the US by revenue include major players like CDW, Ingram Micro, SHI International, and TD-Synnex.

The evolution of the reseller model

The role of the IT reseller has evolved dramatically over recent years, shifting far beyond its traditional focus on hardware sales and one-time transactions. In the past, resellers primarily served as intermediaries that facilitated the purchase and delivery of physical technology products, but the rapid rise of cloud computing and Software-as-a-Service (SaaS) has fundamentally altered their business models and value propositions.

Today, the emphasis has moved decisively from transactional sales to cultivating ongoing relationships and delivering continuous value to clients. This transformation has been driven by several key trends. As hardware profit margins have declined, many resellers have pivoted to service-led offerings, providing managed services where they assume responsibility for the ongoing maintenance and support of a client’s IT infrastructure. This shift from project-based contracts to recurring revenue models offers resellers more predictable income streams while fostering deeper, long-term partnerships with their clients.

The explosive growth of cloud computing has also been a major catalyst for change. Resellers have adapted by expanding their portfolios to include cloud solutions, helping businesses migrate to and manage cloud environments. This encompasses a broad range of services, from Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) to SaaS products, often sourced from leading providers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. By guiding clients through cloud adoption and optimization, resellers add significant strategic value.

Moreover, the distinction between traditional Value-Added Resellers (VARs) and Managed Service Providers (MSPs) has become increasingly blurred. Many VARs have repositioned themselves as MSPs, offering comprehensive IT management services often for a flat monthly fee that covers everything from monitoring and security to troubleshooting and upgrades. This transition allows resellers to provide end-to-end support and peace of mind for their clients.

The rise of the "Everything-as-a-Service" (XaaS) model has further accelerated this evolution, enabling resellers to offer more flexible, scalable, and consumption-based solutions. By embracing these trends, IT resellers have transformed from simple product suppliers into trusted technology advisors and strategic partners, helping businesses navigate the complexities of digital transformation and unlock new opportunities for growth.

A look at the market and its future

The reseller market is a significant and growing segment of the IT industry. The global market for VARs for IT was estimated at approximately $11.83 billion in 2024 and is projected to reach around $21.5 billion by 2033, growing at a compound annual growth rate (CAGR) of 7.5%. Other reports show the market valued at $549 million in 2023 and projected to reach $1.376 billion by 2031, with a CAGR of 12%. The software resellers market was valued at around $45.6 billion in 2024 and is expected to grow to $80.3 billion by 2032.

Looking ahead, several key trends are expected to shape the future of IT reselling:

Artificial Intelligence (AI): AI is set to play a significant role in the future of reselling. AI-powered tools can help resellers with more accurate pricing, identifying popular trends, and even generating personalized recommendations for buyers. As businesses increasingly adopt AI and machine learning, they will look to resellers for cutting-edge solutions that integrate these technologies.

Focus on vertical-specific solutions: There is a growing demand for software solutions tailored to the unique challenges of specific industries. Resellers with deep knowledge of niche markets will be well-positioned for success.

Enhanced customer support and services: As the technology landscape becomes more complex, businesses will seek out resellers who can provide comprehensive support, including implementation assistance, training, and ongoing maintenance.

The reseller as an orchestrator: The role of the reseller is shifting from being a middleman to being a "mission control." They are becoming orchestrators of complex technology solutions, guiding clients through the intricacies of vendors and technologies.

Navigating challenges

Despite the positive outlook, resellers face their share of challenges. These include working with low margins, keeping up with the rapid pace of technological change, and facing intense competition.

To remain competitive, resellers must invest in continuous training for their staff and adopt efficient processes to manage a vast array of products and pricing from multiple distributors.

Ultimately, the IT reseller is a vital part of the technology ecosystem, providing businesses with the expertise, support, and customized solutions they need to thrive in a digital world. While the role has evolved significantly from its transactional roots, the core value of the reseller as a trusted technology partner remains as important as ever.