Operating expenses are the costs of keeping the business alive. They are what you spend on people, tools, marketing, and infrastructure to deliver your subscription product to customers — separate from cost of goods sold (the products themselves) and separate from non-operating costs like interest and taxes.
The main categories
- Personnel costs. Salaries, benefits, contractors. Usually the largest line for a service-led subscription business; smaller share for product-led replenishment subscriptions.
- Sales and marketing. Paid ads, agency fees, content production, influencer payments, affiliate commissions, email platform.
- Software and SaaS. Shopify plan, subscription apps, analytics, customer support tools, design software, accounting platform.
- Office and facilities. Rent, utilities, IT equipment. Smaller share for remote-first teams; larger for warehouse-heavy operations.
- Professional services. Accounting, legal, design, consulting.
- Depreciation and amortization. Non-cash expenses that allocate the cost of long-lived assets over time.
OpEx vs CapEx
Operating expenses are recurring costs of running the business this period — they show up in full on this period's P&L. Capital expenditures (CapEx) are investments in long-lived assets (equipment, buildings, software developed in-house) — they get depreciated or amortized over multiple periods rather than expensed all at once. For a software-light subscription business, almost everything is OpEx. For an operation with significant fulfillment infrastructure or proprietary technology, the CapEx line matters.
OpEx and subscription unit economics
Operating expenses are where operating leverage lives. The whole appeal of a subscription business model is that revenue should grow faster than fixed operating costs — adding a new customer doesn't proportionally increase your software stack, your office, or even most of your team. As scale grows, OpEx as a percentage of revenue should fall. If it isn't falling, that's usually a signal that growth is being bought rather than earned.
The operator's questions
- Is OpEx growing slower than revenue (operating leverage working) or faster (operating leverage failing)?
- What share of OpEx is fixed (rent, salaries) vs. variable (marketing, contractors)?
- Which OpEx categories are growing fastest, and is the spend producing measurable return?
See calculate operating expenses for the mechanics and non-operating expenses for what falls outside.