Table of Content
- Understanding the Three IT Procurement Channels
- Buying Direct from OEMs
- OEM Pros and Cons
- Working with Distributors
- Distributor Pros and Cons
- Working with Value-Added Resellers
- Value-Added Resellers Pros and Cons
- Quick Comparison of OEMs, distributors, and VARs
- Selecting the Right Procurement Channel
Your IT procurement team just received quotes for 200 laptops:
- The OEM direct quote is $1,450 per unit but requires a 90-day lead time and 200-unit minimum
- A distributor offers $1,520 with 30-day delivery and no minimum
- A VAR quotes $1,650 but includes MDM enrollment, imaging, and on-site support.
Which channel delivers the best value? That depends on more than price. Lead times, support requirements, customization needs, and order volumes all determine which procurement channel makes sense. Choose wrong and you'll pay more while getting less.
According to Mordor Intelligence, direct OEM routes account for 45.18% of IT hardware sales in 2024, with large buyers demanding custom builds and priority support. But distributors and VARs serve different needs that OEMs can't address.
This article explains how OEMs, distributors, and VARs differ, when to use each channel, and how to build a procurement strategy that balances cost against speed and service.
Understanding the Three IT Procurement Channels
The IT hardware distribution chain has three main layers, each serving a distinct function:
Original Equipment Manufacturers (OEMs) design and produce hardware. Companies like Dell, HP, Lenovo, and Apple fall into this category. They sell directly to enterprises or through authorized partners. When you buy from an OEM, you're purchasing from the source.
Distributors buy hardware in bulk from OEMs and resell to smaller buyers. They hold inventory, manage logistics, and provide regional fulfillment. Companies like Ingram Micro, Tech Data, and Arrow Electronics operate as distributors. They bridge the gap between OEMs and smaller customers who can't meet OEM minimum order requirements.
Value-Added Resellers (VARs) purchase from OEMs or distributors, then add services before reselling. These services include configuration, integration, training, and ongoing support. VARs bundle hardware with software, customize systems for specific industries, and provide single-source accountability.
The channel you choose determines pricing, lead times, support quality, and flexibility.
Buying Direct from OEMs
OEM direct procurement means purchasing hardware straight from the manufacturer. This channel works best for high-volume buyers with standardized requirements.
Use OEM direct channels when you meet these criteria:
High Volume Requirements
OEMs typically require minimum order quantities. Dell and HP enterprise divisions often set 50-100 unit minimums for direct accounts. If you're deploying 500 laptops annually, direct relationships make sense. For 20 laptops, they don't.
Standardized Specifications
OEMs excel at producing consistent configurations at scale. If your entire engineering team uses identical MacBook Pro 16" models, buy direct. If you need 15 different configurations for various roles, distributors or VARs offer more flexibility.
Long Planning Cycles
OEM lead times range from 30-90 days depending on customization and market conditions. This works when you can forecast needs quarterly. It fails when you need devices next week for urgent hires.
Priority Support Requirements
Direct OEM accounts come with dedicated account managers and priority technical support. For organizations where hardware downtime costs thousands per hour, this matters.
OEM Pros and Cons
Pros
- Lowest per-unit cost by eliminating intermediary markups
- Full manufacturer warranty with direct factory support
- Custom configurations built to exact specifications
- Volume discounts and multi-year contract pricing available
- Priority technical support with dedicated account managers
- Consistent product quality directly from production source
- Budget predictability through long-term price locks
Cons
- High minimum order quantities (typically 50-100 units)
- Extended lead times of 30-90 days
- No configuration, imaging, or deployment services included
- Limited flexibility for order changes or cancellations
- Requires internal IT resources for device setup
- Not suitable for urgent or small purchases
Working with Distributors
Distributors sit between OEMs and end customers, buying in bulk and reselling in smaller quantities. They add value through logistics, not services.
Distributors work best in these scenarios:
Variable Order Volumes
Buy 10 units this month, 50 next month. Distributors handle fluctuating demand without volume commitments. No minimums, no contracts required for spot purchases.
Faster Delivery Requirements
Distributors hold regional inventory and ship within 5-15 business days. When forecasting fails and you need equipment immediately, distributors fill gaps OEMs can't.
Multi-Vendor Procurement
Need Dell laptops, HP monitors, and Cisco networking gear? One distributor order beats three OEM relationships. Consolidate vendors, invoices, and support contacts.
Budget Constraints
Distributors offer payment terms OEMs don't. Net-30, net-60, or even leasing arrangements help manage cash flow for growing companies.
Distributor Pros and Cons
Pros
- Immediate availability from regional warehouse inventory
- No minimum order quantities required for purchases
- Faster delivery within 5-15 business days
- Single source for multiple hardware brands
- Flexible payment terms including Net-30 to Net-90
- Simplified invoicing across diverse product purchases
- Scales easily with fluctuating order volumes
Cons
- Higher per-unit cost with 5-15% markup
- Limited customization to standard stock configurations
- No value-added services like imaging or deployment
- Variable quality control across different distributors
- Potential for refurbished units mixed with new
- No post-deployment support or ongoing maintenance
Working with Value-Added Resellers
VARs purchase hardware, add services, and resell as integrated solutions. The global VAR market is projected to reach $24.84 billion by 2035, growing at 7.5% CAGR.
VARs deliver value in specific situations:
Complex Integration Requirements
Deploying new laptops alongside new software, MDM systems, and network infrastructure? VARs handle the integration work. They configure hardware to work with your existing environment before delivery.
Limited Internal IT Resources
Small IT teams can't configure 100 laptops, image them, enroll in MDM, and deploy. VARs handle this work, arriving configured and ready for users.
Industry-Specific Needs
Healthcare, finance, and manufacturing have specialized compliance and configuration requirements. Vertical-focused VARs understand HIPAA, PCI-DSS, or industry-specific software integration.
Ongoing Support and Maintenance
VARs provide post-deployment support that OEMs and distributors don't. When issues arise, VARs troubleshoot hardware, software, and integration problems from a single contact.
For teams evaluating potential partners, reviewing leading value-added resellers helps identify providers that match your technical and industry requirements.
Value-Added Resellers Pros and Cons
Pros
- Turnkey solutions with devices configured and ready
- Single point of accountability for hardware and software
- Specialized expertise in specific industries or technologies
- MDM enrollment and security policies applied before shipment
- Ongoing post-deployment support and troubleshooting included
- Flexible service packages bundling hardware, software, training
- Handles complex integrations with existing IT environment
Cons
- Highest cost with 15-25% markup over distributors
- Potential vendor lock-in creates switching costs
- Variable service quality across different VAR providers
- Slower delivery with 2-4 weeks for customization
- Not cost-effective for simple, standardized deployments
- Requires thorough vetting of technical capabilities
Quick Comparison of OEMs, distributors, and VARs
| Channel | Best for | Typical tradeoff | What you usually get |
| OEM | High-volume, standardized buys | Longer lead times, minimum order commitments | Lowest unit price, factory warranty, account support |
| Distributor | Fast delivery, mixed-brand purchasing | Higher unit price than OEM | Stock availability, regional fulfillment, flexible ordering |
| VAR | Turnkey deployments and complex rollouts | Highest total cost | Configuration, imaging, mobile device management enrollment, support |
Selecting the Right Procurement Channel
IT procurement channel selection affects more than hardware cost. Lead times, support quality, deployment complexity, and operational flexibility all vary by channel.
- OEMs deliver the lowest per-unit cost but require higher volumes and longer planning cycles
- Distributors offer speed and flexibility at a moderate price premium
- VARs provide integrated solutions and specialized expertise at the highest cost
Most organizations benefit from using all three channels. Build a strategy that relies on OEMs for high-volume purchases, distributors for flexibility and fast turnaround, and VARs for complex deployments. Match each purchase to the channel that best fits its requirements.
The right question is not which channel to use, but which channel to use for each specific purchase.