Considering that nearly 90% of developers use APIs when building software and applications and 69% use third-party integrations, commercializing your API has never been more crucial for unlocking new revenue streams. Whether you're targeting internal dev teams or external partners, setting up the right API monetization strategy is key to scaling.

Many teams lean on tools like Stripe or Moesif to handle billing and usage analytics, integrating them with their billing provider to better understand each API user's behavior and refine pricing models. While a variety of API management platforms support monetization use cases, AWS API Gateway, also known as Amazon API Gateway, remains one of the most common choices for managing and securing your services.

In this post, we’ll break down how to use your Amazon Web Services Gateway to monetize your digital products, explore relevant use cases, and explain why it might not always be the best option depending on your goals and tech stack.

A Quick Recap of Monetized API

API monetization model is transforming your digital products into revenue drivers for your business. 

There are many different monetization models for you to use, but some of the most popular ones include

• Tiered where customers buy into a specific tier that meets their usage needs.

• Bulk cost/pay as you go where customers only pay for what they use versus paying for a subscription or tier.

• Subscription where customers pay a flat rate to integrate with your product.

To help you develop an effective monetization strategy for API users and generate revenue, some important questions would be:

• Who's going to use your APIs?

• What capabilities will they need?

• What integrations will you need?

• Do you offer API analytics?

• How will you determine which pricing model is best for your business?

• Who's going to be responsible for governance and admin?

• How are you going to market and promote your API?

If you're not sure how to price an API, choose the right billing provider, or build a strategy to generate revenue, there are specialists who are ready to help you. Now, let's get into how AWS approaches it.

What’s in Your API Monetization Stack?

Once you’ve defined your pricing model, the next step is building a monetization stack that supports it. Successful API providers rely on a combination of billing, analytics, and access management tools to produce revenue through their API effectively and stay competitive in the API economy.

Stripe for Billing & Payments

Stripe makes it easy to handle both subscription and usage-based pricing models. Whether you offer flat-rate plans or charge per API call, Stripe can integrate the billing flow with your current infrastructure, allowing you to control how revenue is collected from each API consumer.

Moesif for API Analytics

Using Moesif, providers gain deep visibility into consumption metrics around every API, helping them understand how users are using our API: from feature adoption to spikes in usage. Moesif also makes it easier to identify upsell opportunities, enforce fair usage, and get more revenue out of API monetization.

Usage Plans and API Keys

With AWS API Gateway, you can create usage plans and API keys to control access and apply quotas across many APIs. This is essential for managing metric-driven models and ensuring developers don’t exceed limits. It also supports tiered and pay-as-you-go plans while protecting backend systems with rate limiting.

Amazon Web Services API Gateway and Billing Models

First, let's take a look at how the AWS API Gateway fits into how modern businesses are using APIs to drive value. It is a fully managed service that makes it easy to create, publish, maintain, monitor, and secure your Application Programming Interfaces.

This one platform handles a lot of the heavy lifting of managing your APIs, so you can focus on building great products. You can integrate the billing provider of your choice with your current solution to manage payments, charge per API call, or track usage across specific API resources. It also enables you to set up usage plans and enforce limits, putting you in full control of how you charge for API usage.

Since Amazon Web Services API Gateway is integrated with Marketplace and Data Exchange, it lets you easily receive revenue from the APIs you've built with the API Gateway. However, you'll need to configure their API Portal or integrate your own API portal before setting up your monetization.

Amazon Web Services Billing Models

Now that we've covered some basics, let's get into its monetization models. If you plan on selling your APIs through Marketplace, you'll need to bundle your APIs together to create a software as a service (SaaS) product. There are three primary ways his service lets you monetize your APIs:

• SaaS subscriptions: This is a usage-based billing model, even though the “subscription” label may be a bit misleading. Consumers follow a pay-as-you-go structure and are billed based on actual API usage. This model fits well into a flexible API strategy, allowing businesses to adjust pricing dynamically as demand shifts. You can implement rate limiting to control consumption and support a scalable pricing structure across many APIs while still ensuring fair usage.

• SaaS contracts: This is a classic subscription-based model where consumers are billed in advance or on a recurring basis regardless of usage. It provides predictable revenue and is useful when offering fixed API access with defined quotas or service levels. While less flexible than other models, it pairs well with tiered pricing to offer multiple levels of access to different API resources, supporting a more structured API strategy.

• SaaS contracts with pay-as-you-go: This hybrid model gives you the best of both worlds. Consumers commit to a base-level subscription but can still pay for extra API access when they exceed their allocation. It supports both tiered pricing and usage-based billing, making it ideal for businesses offering many APIs with varying demand levels.

Additionally, you have the option to monetize (via subscriptions) your data-based APIs through Data Exchange.

Benefits of Using Amazon API Gateway to Monetize Your APIs

When it comes to commercializing your APIs, Amazon provides several benefits that make it a great option.

Customer acquisition: like all API monetization platforms do—making your APIs available on the AWS Marketplace, you open up your business to a whole new group of potential customers.

Unified billing: If you have multiple APIs, use the gateway's unified billing feature to bill all of them under a single account. However, you must integrate with Marketplace Metering Service or Marketplace Entitlement Service to use this function.

Reporting: AWS provides detailed data about how your digital products are being used. This information can be useful in determining how to optimize your API pricing.

Throttling: Throttling allows you to limit the amount of traffic that comes through your API. This helps you manage your resources and keep your API running smoothly.

Quotas: Setting up a quota system ensures that customers only use the resources they've paid for. This helps prevent the overuse of your API and ensures that everyone pays their fair share.

Potential Downsides of Using Amazon API Gateway to Monetize Your APIs 

While AWS API Gateway is one of the most popular ways to commercialize, there are some potential downfalls to using this method that you should be aware of before deciding to use it for your monetization needs.

Complex configuration: AWS API Gateway is complex to configure and manage, leading to errors and unexpected results. Establishing and maintaining your product monetization involves many moving parts, and it can quickly become overwhelming - especially with multiple usage plans. No alterations to products: If you need to make any adjustments or changes to your product that's listed on Marketplace, you'll need to create a new product.

Insufficient access control: While AWS does allow some accommodations for identity-based, resource-based, and network-based access controls, there are limitations as to which access controls you can place at a specific endpoint. High cost: The AWS API Gateway can be costly, especially if you have a high volume of traffic to your API endpoints, which compounds as you need to access multiple services. Limited developer portal: While AWS does offer its own serverless portal (AWS API Portal), it has limited capabilities and requires advanced configurations to get started. Complicated CI/CD Integration: Setting up CI/CD pipelines requires intermediate to advanced knowledge of all services provided by AWS.  

A Better Alternative to AWS API Portal

At the end of the day, the AWS API Portal is nothing more than a DevPortal, meaning it's only useful to developers. Business teams and citizen developers won't be able to access and consume your products because it's not designed for them. What does this mean for you? It means that on top of spending precious time and resources to configure their portal, your products won't be accessible to a wide range of consumers. Advanced API portals, like Apiboost, make it easy for everyone to discover and consume your products since they are designed to accommodate all your business's needs, not just the developers. In addition to making your products more accessible, these portals also:

• Make it easy to onboard new users and expand your consumer base

• Provide a centralized location for all your documentation

• Have a user-friendly interface

• Eliminate waste by unifying your APIs in one location and preventing duplicates

• Encourage collaboration between your teams

• Provide advanced reporting and analytics

• Quickly customize your content to fit your needs

• Optimize and manage your API products

• Publish your documentation on an easy-to-use interface

• Boost innovation by allowing you to work in teams

• Harness the power of CI/CD pipelines

In order to truly unleash the power of your API monetization with AWS API Gateway, you need to use an API portal.

Maximize Your API's Value With Apiboost

Apiboost gives API providers the tools, features, and flexibility to build a high-performing partner ecosystem—designed for both citizen developers and experienced professionals. Whether you're managing a small set or a large amount of products, Apiboost helps you streamline access, track usage, and generate real value.

With over 100 API portals launched and 10,000+ hours invested in fine-tuning the platform, Achieve brings the experience needed to help you move fast and generate revenue confidently. It also makes it simple to incorporate the billing provider of your choice and align the provider with your current solution, reducing complexity and setup time.

Schedule a demo to see how easily Apiboost connects with AWS API Gateway and starts driving revenue from your APIs.