One of the most common patterns I see with new Amazon sellers is expenses being too high before the business is capable of producing consistent profit. In many cases, sellers are paying for tools, software and subscriptions that their current level of sales simply cannot support.
This leads to a situation where the business may be doing revenue, but it is not actually profitable. In some cases, it is quietly losing money each month. This is something that needs to be addressed early.
In this blog, I am going to break down what I believe are essential expenses, what I believe are optional at the start, and how to think about overheads properly when building an Amazon business.
The Problem With High Expenses Early On
The main issue is not spending money. The issue is spending money on things that do not generate enough profit to cover their own cost.
If your monthly expenses are £300, but your business is only producing £200 in profit, you are not building a business. You are subsidising one. Over time, this leads to frustration, slow growth and people quitting unnecessarily.
Expenses need to be aligned with your current scale.
Essential Expenses (In My Opinion)
These are the tools I consider necessary to operate safely and efficiently.
SellerAmp
SellerAmp is essential for checking profitability, competition, gating status and listing safety. It saves time and prevents costly mistakes.
Keepa
Keepa is non negotiable. You need historical data to understand price trends, sales rank behavior and seasonality. This also included the “magical” Keepa Product Finder.
Seller Toolkit
Seller Toolkit helps with cost tracking, profit visibility and inventory insights. It allows you to understand whether your business is actually making money.
Seller Toolkit Repricer
Repricing manually becomes inefficient very quickly. A basic repricer is essential once you have multiple listings live.
Business Insurance
Business insurance is essential. This protects you against product liability, claims and unexpected issues. This is not optional once you are selling physical products.
These tools form the foundation of a functional Amazon business.
Optional Expenses at the Start
These are not bad expenses, but they are not always necessary immediately.
Accountancy and Accountancy Software
Many people believe an accountant is mandatory from day one. In my case, I did not get an accountant until around eight months in, shortly before VAT registration.
At the start, accounting software and accountants can be expensive. If capital is tight, it is reasonable to delay this and focus on building stock and cash flow first, as long as records are kept properly.
Optional Sourcing Software
Sourcing software can be useful for finding leads, but it is not essential to run your business. Manual sourcing still works extremely well, especially early on.
Lead Groups
Lead groups can be helpful, but they are not vital. Many sellers rely too heavily on leads and forget to build their own sourcing skill.
Bank Subscriptions
Some business banks charge monthly fees. If possible, choose a bank that offers free business accounts at the start. There is no need to pay for features you are not using.
The Goal in the First Few Months
The first month may not be profitable. That is normal. You are setting up systems and learning. However, by month two or three, the business should be producing green months.
This means:
- Expenses are covered
- There is real profit left over
- The business is growing rather than treading water
If this is not happening, something needs to change.
Two Ways to Fix the Problem
If expenses are too high relative to profit, there are only two solutions.
Reduce Expenses
Be ruthless. Remove anything that is not directly contributing to growth or safety. You can always add tools later when the business can support them.
Increase Spend
If you do not want to reduce expenses, you must increase spend. Higher spend leads to higher revenue and higher profit, assuming margins are reasonable.
What does not work is high expenses combined with low spend. That setup will slowly drain capital and kill momentum.
Final Thoughts
Expenses and overheads need to match the size of your business. Tools are there to support growth, not suffocate it. Early on, keep things lean, focus on the essentials and ensure profit outweighs operational costs as soon as possible.
If you are currently struggling to turn a profit, review your expenses honestly. Either reduce them aggressively or increase spend intelligently. Anything else is unsustainable.
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