# SaaS Distribution Strategy > Choose SaaS routes to market: direct, self serve, marketplaces, resellers and integrations, with the margin, control and CAC tradeoffs each one carries. Source: https://saas-marketing.net/guides/saas-distribution-strategy-marketing/ Topic: SaaS Product Marketing Type: guide Published: 2026-09-11 Last updated: 2026-09-11 Publisher: SaaS Marketing (saas-marketing.net) License: CC BY 4.0. Quote or republish with attribution and a link to https://saas-marketing.net/guides/saas-distribution-strategy-marketing/ ## Short answer A SaaS distribution strategy is the set of routes your product travels to reach a buyer: direct sales, self serve, app marketplaces, cloud marketplaces, resellers and MSPs, and embedded or OEM deals. Each route trades margin for reach. App marketplaces typically take 3 to 20 percent of revenue, cloud marketplaces around 3 percent after private offer negotiation, and resellers keep 20 to 40 percent. Pick the route your average contract value can pay for, then prove a repeatable win rate before adding a second. ## Key takeaways - Distribution is downstream of positioning: who you sell to decides which route can carry your price point at all. - App marketplace fees run 3 to 20 percent of revenue, while reseller and MSP margins commonly land between 20 and 40 percent. - AWS and Azure marketplace listings matter mainly because purchases draw down a customer's committed cloud spend. - Adding a second route before the first has a repeatable win rate usually costs more in channel conflict than it returns in pipeline. - Self serve below roughly 5,000 dollars annual contract value, direct sales above 25,000 dollars, hybrid in between. - Every route needs its own pricing, packaging and support model, not a copy of your direct price list. --- Most teams pick a distribution route by accident. Someone signs a reseller agreement because a partner asked, a listing goes live on the HubSpot App Marketplace because an engineer had a spare sprint, and eighteen months later nobody can say which route actually produces renewals. The route you sell through determines your gross margin, your renewal control and how much of the customer relationship you ever see. It deserves the same rigour you give [positioning](/saas-product-marketing/), because it is a consequence of positioning rather than a separate decision. ## What are the six routes to market for SaaS? There are six, and almost every SaaS company uses two or three of them. Direct sales, self serve, app marketplaces, cloud marketplaces, resellers and MSPs, and embedded or OEM. The differences that matter are margin give up, how much of the customer relationship you keep, and how long it takes to see a first dollar. **Direct sales.** Your sellers, your contract, your renewal. Full margin, full control, and a cost structure that needs roughly 25,000 dollars in annual contract value before the maths works. Below that the fully loaded cost of an account executive eats the deal. **Self serve.** Credit card, no human. Gross margin near 100 percent minus payment processing, and the hardest route to build because the product has to do the selling. Calendly, Loom and Linear all run this as the primary motion. **App marketplaces.** Salesforce AppExchange, HubSpot, Atlassian, Shopify, Slack. You get placement inside a platform your buyer already uses and a strong integration story. You pay a revenue share and you inherit the platform's roadmap risk. **Cloud marketplaces.** AWS Marketplace, Azure Marketplace, Google Cloud Marketplace. Lower fees than app stores, and the real prize is procurement speed rather than discovery. **Resellers and MSPs.** Someone else's sales team, someone else's customer relationship, 20 to 40 percent of your revenue gone permanently. Excellent for geographies you cannot staff and for buyers who purchase everything through one vendor. **Embedded and OEM.** Your product inside their product. Twilio built a large share of its early revenue this way, sitting inside applications whose end users never saw the Twilio brand. ## Which route costs you what? Here is the comparison most vendors will not publish, because the margin column is uncomfortable. Read that table once more with your own gross margin in your head. A company running 78 percent gross margin that hands 35 percent of list to a reseller is now operating a 43 percent margin business on that revenue stream. That can still be the right call if the partner brings deals you would never reach. It is a terrible call if you are paying that margin on accounts your own team sourced. Every additional route needs its own pricing page, its own contract paper, its own support tier and its own quota carrier. Budget one full time person per route for the first year. Teams that skip this run three half staffed channels and wonder why none of them convert. ## How do cloud marketplace co-sell mechanics actually work? The fee is not the point. Committed spend drawdown is the point. A customer on an AWS Enterprise Discount Program agreement has promised to spend a fixed amount with AWS over several years. Purchases made through AWS Marketplace count against that commitment. So when your 120,000 dollar contract runs through the marketplace, the customer is spending money they had already committed, and the approval conversation changes from "can we fund a new vendor" to "can we allocate existing commitment". The practical flow looks like this. You list the product publicly, usually with a placeholder price. The real transaction happens as a private offer: custom price, custom term, custom payment schedule, generated in the seller portal and accepted by the buyer inside their own AWS account. Fees on private offers sit near 3 percent, far below public self serve listing rates. **Getting a cloud marketplace listing to produce revenue** Datadog is the clearest example of a company that treated cloud marketplace presence as infrastructure rather than a side listing, and the [Datadog marketing strategy teardown](/examples/datadog-marketing-strategy/) walks through how that sat alongside their product led motion. ## When does an app marketplace listing pay off? When the platform is where your buyer already works and your product cannot function without that integration. HubSpot App Marketplace listings work for tools that genuinely live inside HubSpot data. They do not work as a generic discovery channel, and treating a listing as a marketing channel is the most common waste of an engineering quarter I see. Three tests before you build: - The platform has more customers in your ICP than your own list does. - Your product breaks or loses most of its value without the integration. - You can name at least two competitors already listed and describe how your listing page beats theirs. If you fail the third test, you are about to be the fourteenth result in a category page nobody scrolls. Build the [comparison pages](/playbooks/saas-comparison-pages/) on your own domain first, where you control the narrative and keep the traffic. **3% to 20%** Typical revenue share taken by app marketplaces on SaaS listings ## What sequence should you add routes in? Sequence by average contract value, and add one route per year at most. Below 5,000 dollars ACV, self serve is your primary and everything else is a distraction. Between 5,000 and 25,000 dollars, self serve plus one app marketplace, with a small sales team handling expansion. Above 25,000 dollars, direct sales first, then cloud marketplace once you have three enterprise logos to reference, then resellers for geographies you cannot staff. The rule I would defend in any room: do not add a second route until the first one has a repeatable win rate. Repeatable means at least two sellers or two acquisition surfaces producing similar conversion across two quarters. Channel conflict costs more than the incremental pipeline is worth, and it costs it in the form your team hates most, which is arguments about who gets paid. A reseller registers an account your SDR has been working for five months. Now you either burn the partner or burn the rep. Write the deal registration rules, the exclusivity window and the tiebreak before you sign the first partner agreement, not after the first dispute. Use the [SaaS TAM calculator](/calculators/tam-sam-som/) to check something specific before committing: whether the accounts a given route unlocks are actually accounts you could not reach directly. If the overlap is above roughly 60 percent, you are paying channel margin for customers you already had. ## What does each route demand from marketing? Different work, not more of the same work. Self serve needs onboarding, pricing clarity and the whole [content engine](/saas-content-marketing/) doing the top of funnel job. Direct sales needs deal support material and competitive intelligence. Marketplaces need a listing page written like a landing page, screenshots that survive compression, and review volume, because marketplace search ranking leans on reviews harder than Google does. Partner routes need something most product marketing teams have never built: enablement written for someone who sells nine other products. Assume your partner's rep gives you four minutes of attention per quarter. A one page battlecard, three discovery questions and a single pricing sheet will outperform your gorgeous forty slide deck every time. Keeping a current view of who else is fighting for the same shelf space matters more in channel than in direct, and the guide to [competitive intelligence tools](/guides/competitive-intelligence-tools/) covers how to monitor partner marketplaces for new entrants. ## What breaks, and what it costs Three failure modes worth naming honestly. Marketplace listings decay. Screenshots go stale, the platform changes its category taxonomy, reviews stop arriving. A listing with no review in fourteen months reads as abandoned. Budget a quarterly refresh or do not list. Reseller revenue is not your revenue. You lose usage data, renewal signal and the ability to run expansion plays. If net revenue retention is your growth engine, every account behind a partner is an account you cannot expand. Some companies solve this with co-termed direct support relationships. Most do not, and their NRR quietly splits into two very different numbers. Embedded deals concentrate risk. One OEM partner at 30 percent of revenue is a company with one customer. Price that risk into the contract with volume commitments and a long notice period, or accept that your valuation multiple will reflect it. ## Where to start this quarter Write down your current routes and the actual revenue each produced last quarter, not the pipeline. Most teams discover one route produces 85 percent and the others are hobbies. Kill the hobbies or staff them properly. Then pick the next route by ACV band and commit to a year. If you are heading toward a marketplace listing alongside a release, the [product launch playbook](/playbooks/saas-product-launch/) sequences those two things so the listing goes live with review momentum rather than silence, and the broader guide to [marketing a SaaS product](/guides/marketing-a-saas-product/) covers the positioning work that should precede any of this. ## Frequently asked questions ### What is a SaaS distribution strategy? It is the deliberate choice of which routes carry your product to buyers and in what order. The common six are direct sales, self serve, app marketplaces, cloud marketplaces, resellers and MSPs, and embedded or OEM deals. Each has a different margin give up, a different level of control over the customer relationship, and a different time to first revenue. ### How much do SaaS marketplaces take in fees? It varies by marketplace. Salesforce AppExchange and similar app stores commonly take a percentage in the 3 to 20 percent range depending on listing tier and whether the partner sources the deal. AWS Marketplace and Azure Marketplace charge listing fees in the low single digits for private offers, with higher rates on public self serve listings. Always model the fee against the committed spend benefit. ### Is AWS Marketplace worth listing on? It is worth it when your buyers have committed cloud spend to burn. A purchase through AWS Marketplace draws down the customer's Enterprise Discount Program commitment, which turns your invoice into budget they have already spent. For enterprise deals that alone can shorten procurement by weeks. It is rarely worth it for products sold to buyers with no cloud commitment. ### What margin do SaaS resellers expect? Most reseller and MSP agreements land between 20 and 40 percent off list, with the higher end reserved for partners who handle implementation, first line support and renewal. If a partner only passes a lead, that is referral compensation and should be paid as a one time 10 to 15 percent fee, not a recurring margin on the subscription. ### When should a SaaS company add a second distribution channel? After the first route shows a repeatable win rate across at least two quarters and more than one seller or one acquisition surface. Before that, a second route mostly creates conflict: deals arrive through two paths, compensation disputes start, and your team learns nothing clean about either motion. Sequence beats simultaneity here. ### What is embedded or OEM SaaS distribution? Another company builds your product into theirs and sells it as part of their offering. You give up brand presence and often most of the margin, and you gain volume plus a distribution partner whose sales team is already in the account. Twilio and Stripe both grew significant revenue this way through developer embedded usage inside other products. ### Does channel distribution raise or lower CAC? It lowers acquisition cost per deal and raises cost of revenue. You spend less on marketing and sellers because the partner supplies the relationship, then you hand over 20 to 40 percent of the contract value permanently. That trade is good for low touch, high volume products and bad for products where expansion revenue is the main growth engine.