Value Added Reseller vs. Doing it yourself BY: Mark Johnson

March 10, 2012 by Mobile Beat Staff Writer

In the wholesale, commercial world, there is an entity called a Value Added Reseller, otherwise known as a VAR. A VAR has access to standard products but adds value (duh) to them to create larger, more valuable products. One of the more significant uses of the VAR concept is computer resellers. They purchase computers (perceived of as a commodity) and
bundle them with the necessary network, communication and application software to create a finished business system.

Sure, any regular company could purchase a server from a system supplier, the network and communication software from another supplier and the application software from a third supplier. Then, acting as his own “GC” or “General Contractor,” he could oversee the assembly of these components and hope that the time spent in this effort would not exceed the cost savings by doing it himself.

One of the values of a VAR is that they have put together many systems of a similar configuration and know all of the possible problems and how to fix them. Thus, they deliver a cohesive, single product to their customer, adding value along the way. Sure, their cost is greater than the sum of the components.

But the end result is the correct system, operating in the proper manner. Plus, the customer can always call the VAR to handle future problems instead of 3-4 separate suppliers, who will no doubt deflect responsibility. Similarly, Mobile DJs are concerned about the general population (our prospective clients) being able to “do it yourself” regarding providing music for their upcoming event. Sure, the client could play “GC” and take their collection of MP3s, rent a decent sound system, perhaps rent some lighting, transport it to their event, set it up, make sure it all works together properly and end up with virtually the same effect as if they hired a DJ. But they often overlook the need for someone to run the system during their event. Unless they have a rigid pre-made playlist, or can settle for shuffle mode, someone will have to properly sequence the songs to match the unpredictable mood of their event.

Plus, they also overlook the need for a microphone and someone who can use it properly. Finally, they have to take down the system and return it to the rental company they got it from. Would they have saved some money? Sure. Would they be burning the candle from both ends, having to be the host AND the DJ at the same time? You bet. What’s it worth to the client to leave all of this to a single, cohesive professional instead of trying to patch the individual components together?

Our advantage is that we specialize in combining all of these elements into a cohesive “product” instead of “winging it.” We’ve done hundreds of parties before and can usually cover all the bases. Part of the challenge is identifying the comfort or participation level of the customer and seeing how much of our service spectrum we can provide. In today’s world, it boils down to the music that often convinces the client that that’s all it is. I play racquetball with someone who is becoming a Certified Financial Planner. As we were talking about what a CFP does, I can see some overlap between the professional services that he offers and those same services that individual investors can do for themselves.
As he was extolling the virtues of a CFP, he immediately drew a comparison to a smart person not doing his own heart surgery or his own dentistry. While true, it is an overly simple analogy to the value of his professional services to those that obviously one cannot do for oneself.

Oddly enough, his profession is in more jeopardy than ours. Granted, his stakes are higher, but in todayÕs world, many elements that make up a profession can individually be automated or made common. For this CFP, it boils down to three elements: Knowing what and when to buy or sell, being able to actually make the trade and to have an overall knowledge of the marketplace.

With all of the on-line trading websites, any regular person can sign up and pay a small fee to execute their own trades.
Mechanically, you don’t need a traditional stock broker anymore. Recall Gomez Addams commanding his broker to buy or sell. That broker never appeared to offer any stock information or guidance. He was merely an executor of the physical trade that the regular person could not perform.

But Mr. Addams had done his homework to know which stocks to buy or sell and when to execute that trade. Thus, Mr.
Addams did what he could do, leaving what he couldn’t do to a “professional.” Today, a regular person reviewing stock trades can both do his homework AND execute the trade. A CFP, as indicated earlier, can offer professional oversight on the entire spectrum of stock choices as well as understand the client’s needs and goals.
How does this relate to a Mobile DJ?

Let’s review all the services that we provide and draw a line between those that we can do and what the customers can do for themselves.

Like the CFP there are things a mobile DJ can do that regular people cannot. So Mr Addams would thrive in today’s marketplace, not having to pay the commission to this middleman. There’s the key word, “middleman.” Get rid of the middleman and you get rid of a layer of commission that you don’t need to pay (or cover).

Like someone doing his or her own stock trading, a regular person attempting to perform his own DJ services would have to temporarily acquire specialized knowledge to get the job done. Owning the music is just the beginning. MB

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Mobile Beat Staff Writer (228 Posts)

This is the general editors account for Mobile Beat Magazine and Website. Who reads Mobile Beat online and in print and attends Mobile Beat events? DJs, VJs and KJs to start with, especially those who own and operate mobile entertainment services. They provide music, video, lighting and a myriad other entertainment choices for corporate events, wedding receptions, dances and innumerable other gatherings.


Filed Under: Business, Issue #141