AWS Reserved Instances Marketplace The 101 Guide

by Maxim Melamedov | November 20, 2019
101-guide

The Reserved Instances Marketplace gives you a great opportunity to take advantage of the biggest discounts given by AWS while benefiting from the power of a community of companies (1.2M and growing) that allows you to use the RI for as long as you need. Under this system, you can sell or buy RIs for as short a duration as you need.

This system is called the RI Marketplace.

Here are some ground rules of the Marketplace that you should be aware of:

  • Anyone can buy RIs from the Marketplace
  • To become a registered seller you’ll need a US bank account
  • The RI needs to be assigned to your account for at least 1 month before it can be put up for sale.
  • The RI must be sold for a minimal duration of one month.

Here are two tips on how you can sell your RIs faster

1. The Linux Instance Size Flexibility feature makes it advisable to convert your RIs to the smallest instance type possible prior to putting it up for sale.

For example, if you have an over-reserved Linux capacity of 1 RI type c5.9xlarge, to simplify the sale process you should convert it to 18 RIs of c5.large

c5.9xlarge x 1 RI Instance = 72 units
c5.large x 18 RI Instance = 72 units

This way, you are able to sell your RI in small chunks and to many buyers rather than to a single buyer that needs exactly 72 units.

* RI conversions create a new RI Id, which is considered a new RI that has a one-month locking period on your account. So, if you plan to utilize the RI Marketplace, you should convert your RIs to the smallest instance size available in that instance family.



2. Choosing the right pricing - this depends on how you purchased the RI

No upfront - best advice here is to set the selling price to $0, as this is how much you paid for it. Trying to monetize on your RI will make your offer less attractive.
Partial upfront - this is a bit tricky as you would have to set a $ price per each month you have left.

For example, you have an unutilized t2.large US West (Oregon) us-west-2 that was purchased as 1Y partial upfront with an upfront price of $120, and you have two months of the RI left.
By setting the following sale prices according to ($120/12 months =$10 per month) 2nd month $20 and 1st month $10, you would allow the buyer to benefit from the original discount of 41%.
Alternatively, you could set the price for the second month at $10. This way, you would lose on the $10 but most likely your RI would be purchased faster and you would not be paying for it anymore

All upfront - here, pricing is very important as you’ve paid AWS the full value of the RI and now every dollar that you sell it for will go back to your budget. The pricing strategy should be similar to the partial upfront. Setting a price too low will cause you to lose a lot of money.



According to Cloudvisor’s data, over 32% of the total offerings on the Marketplace are priced incorrectly, causing the sellers not to sell their RIs and lose money.



Cloudvisor has a Reserved Instance(RI) Lifecycle Management Solution that automates the process of buying and selling RIs. This means that you or your team no longer have to manually handle this. That means no capacity planning, no pricing analysis, no long term commitments, no changes, and best of all, Cloudvisor only charges based on what they save you.