--- title: "Marketplace vs Direct Sales: When Each Wins" url: https://www.suger.io/resources/blog/marketplace-vs-direct-sales/ canonical: https://www.suger.io/resources/blog/marketplace-vs-direct-sales/ type: Blog description: "Marketplace vs direct sales: a decision framework by deal shape, plus the cases where selling through a cloud marketplace is the wrong choice for an ISV." --- # Marketplace vs Direct Sales: When Each Wins > Canonical HTML version: https://www.suger.io/resources/blog/marketplace-vs-direct-sales/ 1. [Home](/) 2. / 3. [Resources](/resources/) 4. / 5. [Blog](/resources/blog/) 6. / 7. Marketplace vs Direct Sales: When Each Wins # Marketplace vs Direct Sales: When Each Wins Most writing on this question is produced by companies paid when you choose the marketplace. Here is the honest version, including the deals where direct is plainly the better channel. [![Chloe Wu](/authors/chloe-wu.jpg)](/resources/blog/author/chloe-wu/) [Chloe Wu](/resources/blog/author/chloe-wu/) Aug 9, 2026 ![Marketplace vs Direct Sales: When Each Wins](/images/blog/marketplace-vs-direct-sales/hero.png) Explore AI Summary [![](/logos/company/openai.svg)](https://chat.openai.com/?q=Read%20and%20summarize%20https%3A%2F%2Fwww.suger.io%2Fresources%2Fblog%2Fmarketplace-vs-direct-sales%2F%2C%20then%20cite%20the%20source.%20Focus%20on%20what%20it%20says%20about%20Cloud%20GTM%2C%20Marketplaces. "Summarize with ChatGPT")[![](/logos/company/anthropic.svg) ](https://claude.ai/new?q=Read%20and%20summarize%20https%3A%2F%2Fwww.suger.io%2Fresources%2Fblog%2Fmarketplace-vs-direct-sales%2F%2C%20then%20cite%20the%20source.%20Focus%20on%20what%20it%20says%20about%20Cloud%20GTM%2C%20Marketplaces. 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"Summarize with Perplexity") Table of Contents - [When does a cloud marketplace win?](#when-does-a-cloud-marketplace-win) - [When is direct the better channel?](#when-is-direct-the-better-channel) - [The decision framework](#the-decision-framework) - [The framing that resolves most arguments](#the-framing-that-resolves-most-arguments) - [Frequently asked questions](#frequently-asked-questions) - [Takeaways](#takeaways) _Marketplace and direct are procurement channels for the same deal, not competing strategies. A cloud marketplace wins when the buyer holds committed cloud spend, when procurement is the bottleneck, or when the transaction should be self-serve. Direct wins when the terms are bespoke, the fee is disproportionate to what it buys, or the buyer has no cloud commitment at all._ * * * “Should we sell through the marketplace or direct?” is the wrong question, asked at the wrong altitude, roughly once a quarter. It is the wrong question because it treats the two as strategies. They are not. They are procurement paths for a deal you have already won or lost on the merits, and the correct choice varies deal by deal — sometimes within the same account across two consecutive years. The right question is narrower and much more answerable: **for this deal, with this buyer, does routing through a marketplace make the transaction faster, larger, or cheaper — and by enough to justify the fee?** Below is a framework for answering it, including the cases where the answer is no. * * * ## **When does a cloud marketplace win?** Four conditions. The more of them a deal meets, the stronger the case. **1\. The buyer holds a committed cloud spend agreement.** This is the single strongest signal, and it is close to decisive on its own. A customer with an [AWS EDP](/resources/blog/aws-edp-what-sellers-need-to-know/) or a Microsoft committed-spend agreement has already promised to spend a certain amount with that cloud. A marketplace purchase draws down that commitment. You are not asking for new budget; you are helping them use budget they are already obligated to spend — and if they don’t, they lose it. It is worth being precise about who benefits: the buyer’s incentive here is real and large, and it is often larger than your discount. A deal that stalls on budget can restart entirely on this basis. **2\. Procurement, not the buying decision, is the bottleneck.** If the technical evaluation is finished and the deal is sitting in vendor onboarding, security review, or legal, a marketplace transaction can bypass a process the customer has already completed once — for the cloud provider. The buying decision is unaffected; the paperwork is. **3\. The transaction should be self-serve.** For low-touch, high-volume products, a public marketplace listing is a functioning transaction path that costs you no sales time. Direct equivalents require billing infrastructure you would otherwise build. **4\. A channel partner is in the deal.** Where a reseller or systems integrator transacts, marketplace channel constructs give you a structure with defined margin mechanics rather than an ad hoc paper trail. There is also a size effect, and it is worth citing carefully because it is frequently misattributed. CrowdStrike has reported that its AWS Marketplace transactions run around **140% larger** than its direct deals. That is one company’s published benchmark on one marketplace — not a rate anyone should expect by default — but it is consistent with what the committed-spend mechanic would predict. * * * ## **When is direct the better channel?** This is the part most marketplace content omits. Four cases where direct is straightforwardly correct. **1\. The buyer has no cloud commitment, and no cloud preference.** Strip out the drawdown and the procurement shortcut, and the marketplace’s advantages mostly disappear while its fee does not. A buyer who runs on-premises, on a cloud you aren’t listed on, or with no committed spend is a buyer for whom the marketplace adds a fee and a step. **2\. The commercial terms don’t fit.** Marketplace agreements have real structural limits. Pricing models are frozen at publication on AWS and Microsoft. Contract durations come from a defined set. A customer who cannot reduce a contract mid-term on a marketplace can renegotiate a direct contract at any time. If a deal genuinely requires bespoke structure — unusual payment triggers, non-standard termination rights, an entity structure the marketplace doesn’t support — direct is not a workaround, it is the right answer. The constraints are covered in [cloud marketplace pricing models](/resources/blog/cloud-marketplace-pricing-models/). **3\. The fee is disproportionate to what it buys.** The listing fee is not one number. On AWS it varies by deployment method, offer type, contract value, channel, and buyer region — and the spread between the cheapest and most expensive case on identical revenue is large. A high-volume, low-value product delivered in a form that attracts the highest rate may simply not clear the bar. [What a marketplace dollar actually costs you](/resources/blog/what-a-marketplace-dollar-costs-you/) works the arithmetic case by case. Note that the answer is often “change the packaging,” not “abandon the channel.” **4\. You cannot yet operate the post-sale motion.** Marketplace agreements generate entitlements, metering obligations, renewal events, and disbursements that reconcile on someone else’s schedule. An organisation that cannot yet track those will lose more to missed renewals and unmetered usage than it gains in deal velocity. This is a readiness question, not a strategy question — and the honest answer for a very small team is sometimes “not yet.” * * * ## **The decision framework** Run a deal through these in order. The first clear answer usually decides it. Question If yes If no Does the buyer hold committed cloud spend they need to draw down? Marketplace, strongly Continue Is procurement or vendor onboarding the thing blocking the close? Marketplace Continue Does a channel partner need to transact the deal? Marketplace, with a channel offer construct Continue Do the terms require structure the marketplace can’t express? Direct Continue Is this low-touch and high-volume? Marketplace, public listing Continue Does the fee exceed what the speed and size gain is worth? Direct — or repackage and re-ask Marketplace Two notes on using it. **The buyer’s answer outranks yours.** If enterprise procurement says “we buy through our cloud agreement,” the framework is already resolved. Arguing the fee with a buyer who has told you how they purchase is a good way to introduce friction into a deal you had won. **Re-ask at renewal.** The right channel at renewal is often not the right channel at first purchase — committed spend positions change, and marketplace renewals typically transact at a lower fee than the original deal. * * * ## **The framing that resolves most arguments** Marketplace and direct are frequently discussed as though revenue moves from one column to another, and someone loses. That framing is what makes the internal conversation adversarial: sales suspects marketplace revenue is discounted revenue, alliances suspects direct is protecting a comp plan. A more useful frame: **the marketplace is a payment and procurement rail, not a demand channel.** It does not generate demand by existing. What it does is remove friction from a purchase decision that has already been made, and unlock a budget the buyer already holds. Read that way, the question stops being “which channel” and becomes “what does this specific buyer need in order to complete a purchase they have already decided to make.” Sometimes that is a marketplace private offer. Sometimes it is an order form. Neither answer is a loss. The broader strategic context — where marketplace fits alongside co-sell, channel, and direct motions — is covered in the [Cloud GTM guide](/resources/guides/cloud-gtm/). * * * ## **Frequently asked questions** **Is it better to sell through a cloud marketplace or direct?** Neither is universally better. Marketplace wins when the buyer has committed cloud spend to draw down, when procurement is the bottleneck, or when the transaction should be self-serve. Direct wins when terms are bespoke or the buyer has no cloud commitment. **Why do marketplace deals close faster?** Because the buyer has already onboarded the cloud provider as a vendor. The marketplace transaction reuses a procurement, security, and legal path the customer completed once, rather than starting a new one. **Are marketplace deals larger than direct deals?** They can be. CrowdStrike has reported its AWS Marketplace transactions running around 140% larger than its direct deals. That is one company’s published benchmark, not a rate to expect by default. **When should an ISV not use a cloud marketplace?** When the buyer has no committed cloud spend, when the deal needs contract structure the marketplace can’t express, when the listing fee outweighs the speed and size gain, or when you can’t yet operate the post-sale motion. **Does selling on a marketplace cannibalise direct revenue?** It moves where a transaction happens, not whether it happens. The relevant question is whether the fee buys enough speed, size, or budget access to justify it for that specific deal. **Should the channel decision be made per deal?** Yes. The right channel depends on the buyer’s commitment position, the deal’s terms, and the bottleneck in that cycle — all of which change between deals and between renewals in the same account. * * * ## **Takeaways** - Marketplace and direct are procurement paths for the same deal, decided per deal rather than as a strategy. - Committed cloud spend is the strongest single signal. A buyer drawing down a commitment has an incentive larger than most discounts. - Marketplace is the wrong channel when there is no cloud commitment, when terms need bespoke structure, or when the fee outweighs the gain. - CrowdStrike’s published AWS Marketplace benchmark — deals around 140% larger than direct — is one company’s result, not a default. - Repackaging often beats abandoning: deployment method and offer type move the fee more than the channel decision does. - Re-ask the question at renewal. Commitment positions change, and renewals usually transact at a lower fee. * * * The channel decision is easier when both paths are visible in the same system. See how the [Suger Cloud GTM platform](/platform/) runs marketplace listings, private offers, co-sell, and billing alongside your direct motion — so choosing a channel is a commercial decision rather than an operational one. ### Stay Updated Get the latest Cloud GTM insights, product updates, and marketplace strategies delivered to your inbox.