Which Form of SaaS Distributer Agreement Do You Need?

Short answer: which channel agreement you need turns on three questions: who pays you, who signs the end-user contract, and who provisions the service. Referral, reseller, distributor, and OEM agreements each answer those differently.

I often get the question of which type of SaaS distribution agreement do I need: a SaaS reseller agreement, SaaS distributor agreement, SaaS referral agreement, or SaaS OEM agreement. While these can be structured differently, here are some general rules (about 80% true).

Q1. Who Is Paying the Vendor?

A1) End User goes to a Referral Agreement.

A2) Partner goes to OEM, Distribution, and Reseller Agreements.

Q2. Who Is Entering into the Agreement with the End User?

A1) Vendor goes to Distribution, Reseller, and Referral Agreements (license resale).

A2) Partner goes to OEM Agreement (sublicensing).

Q3. Who Is Provisioning or Configuring the Service for the End User?

A1) Vendor goes to Distributor, Reseller, and Referral Agreements.

A2) Partner goes to OEM Agreement (some distributors do this too).

The Four Models in One Line Each.

Once you have answered those three questions, the right form usually falls out:

• Referral Agreement. The partner sends you a lead, you sign and bill the end user, and you pay the partner a referral fee. Lightest touch, lowest risk to the partner.
• Reseller Agreement. The partner buys your license and resells it, but you still hold the end-user agreement. You keep control of your terms.
• Distributor Agreement. Like a reseller, often with a tier of sub-resellers underneath and more independence to price and package.
• OEM Agreement. The partner embeds or sublicenses your software inside its own product and signs its own contract with the end user. The most integrated, and the one that needs the tightest IP and liability terms.

A Quick Worked Example.

So here’s the hypothetical. A consulting firm wants to “sell” your analytics platform to its clients. Walk the three questions. Who pays you? If the consulting firm pays you and marks the price up to its client, that is partner-pays, so you are in reseller, distributor, or OEM territory (not referral). Who signs the end-user contract? If you still want your terms in front of the client, you hold the end-user agreement, which points to reseller or distributor, not OEM. Who provisions the service? If your team still stands up the tenant, that confirms reseller or distributor. Now the choice is just reseller vs. distributor, which usually comes down to whether the consulting firm will have sub-resellers under it. Three questions, and you are down to one decision.

The Mistake to Avoid.

The common error is letting the sales team name the deal before anyone maps the money and the contract flow. A relationship everyone calls a “referral” but where the partner sets price and bills the client is really a reseller deal, and papering it as a referral leaves your pricing and end-user terms unprotected. Reseller and distributor pricing freedom is itself shaped by antitrust law: the Supreme Court’s decision in Leegin Creative Leather Products v. PSKS put vertical minimum-price agreements under the rule of reason, which is why how you handle reseller pricing belongs in the structure conversation. The structure you pick drives who carries the IP, indemnity, and liability risk, so it is worth getting right at the outset.

Frequently Asked Questions.

What is the difference between a reseller and a distributor agreement? Both have the partner buying and reselling while you keep the end-user terms. A distributor typically has sub-resellers beneath it and more freedom to price and package.

When do I need an OEM agreement instead? When the partner embeds or sublicenses your software into its own product and signs its own contract with the end user. That is the most integrated model and needs the tightest IP and liability terms.

Is a “referral” deal really just a referral? Only if you sign and bill the end user and the partner just sends leads. If the partner sets price and bills the client, it is a reseller deal no matter what sales calls it.

For the detailed breakdown of how the channel models actually differ and which one fits your deal, see SaaS Reseller and OEM Agreement Models. If you want the right form drafted for your channel, that is what our vendor-side SaaS attorneys do.

I hope this helps.

Disclaimer:

This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.