Boost Your Amazon Profits: How to Find and Fix Hidden Profit Leaks
Amazon sellers often focus on revenue, ROAS, and top-line growth, but those numbers do not always tell the full story. A brand can be growing sales and still losing profit through hidden costs, inefficient ad spend, poor inventory planning, unnecessary fees, weak financial reporting, or tax planning gaps.
In this webinar, Intentwise hosted Matt Remuzzi from CapForge for a practical session on how ecommerce brands can identify and fix the hidden profit leaks that quietly reduce margins.
Matt explained that many ecommerce businesses start with healthy profit expectations, often projecting 20 to 25 percent margins, but later discover they are only keeping 3 to 5 percent. In many cases, the issue is not one major problem. It is a collection of smaller leaks across the business that add up over time.
Start with better financial visibility
The first step to fixing profit leaks is knowing where they are happening. Matt emphasized that sellers cannot manage the business by looking only at their bank balance. Cash in the bank does not show whether individual SKUs are profitable, whether ad spend is creating incremental profit, or whether hidden expenses are cutting into margins.
Instead, ecommerce brands need accurate, timely, accrual-based financials. This gives teams a clearer view of revenue, true product costs, fees, ad spend, gross profit, and net profit. Matt recommended that sellers regularly review their profit and loss statement, balance sheet, cash flow statement, and key operating KPIs.
The message was clear: good data beats gut feeling. Without accurate financials, brands may not realize how much profit is leaking until the problem becomes much harder to fix.
Know your true landed cost
One of the biggest profit levers Matt discussed was cost of goods sold. Many sellers calculate product profitability using a basic purchase cost, but that does not always reflect the true cost of getting a product into a customer’s hands.
True landed cost should include shipping, tariffs, customs, lost units, returns, unsellable inventory, damaged goods, and packaging. If those costs are not being captured correctly, sellers may believe a SKU is profitable when it is actually losing money.
Matt encouraged sellers to review SKU-level profitability every month and be willing to make tough decisions. If a product is not profitable, brands need to adjust pricing, reduce costs, improve sourcing, or consider removing that SKU.
He also highlighted supplier negotiations as an often-overlooked opportunity. Brands should regularly compare vendors, revisit terms, and avoid assuming that the original supplier relationship is still the best option.
Reevaluate ad spend through the lens of profit
Ad spend is one of the most visible costs for Amazon sellers, but Matt noted that it is not always evaluated correctly. A campaign may drive sales, but that does not mean it is driving profitable or incremental sales.
Sellers should closely monitor campaigns, keywords, SKUs, bidding strategies, and branded search campaigns. Matt suggested testing whether some branded ads are truly necessary, especially when shoppers are already searching for the brand by name.
The key question is not simply whether ads are producing revenue. The better question is whether those ads are producing incremental profit.
Matt also encouraged brands to think more deeply about customer targeting. Instead of only advertising by product category, sellers should consider the specific customer, the use case, the pain point, and the buying psychology behind the purchase.
Watch fulfillment, platform, and operational fees
Another common source of profit leakage is fees. As Amazon’s fee structure becomes more complex, brands need to be more intentional about fulfillment strategy, packaging, product size, storage, and inventory placement.
Matt discussed the importance of balancing Amazon fulfillment with 3PL options, depending on cost, inventory availability, and customer experience. He also cautioned brands to carefully evaluate international expansion, especially into markets like the UK or EU, where VAT, shipping, localization, and compliance costs can quickly erode profit.
Operational costs also deserve regular review. Software subscriptions, agency fees, unused tools, and inefficient workflows can quietly drain profit if no one is actively managing them.
Do not ignore tax planning
After brands work hard to improve profitability, Matt said the final leak can happen at tax time. Many ecommerce businesses miss tax-saving opportunities because they are not working with an accountant who understands ecommerce.
He discussed the importance of tax planning, entity structure, cash-basis filing when applicable, S corp considerations, accountable plans, and properly capturing eligible business expenses. The larger point was that sellers should not wait until tax season to think about taxes. Tax strategy should be part of the profit plan throughout the year.
Plan for the eventual exit
Matt closed with a bonus lever: exit planning. For many ecommerce founders, the largest financial outcome comes when they sell the business. But that value is only unlocked if the business is prepared.
A planned exit requires clean financials, strong profitability, reduced operational messiness, and a clear understanding of the right buyer. Matt explained that a strategic buyer may value the business more than a general buyer if the brand, audience, or product line creates a natural fit.
The takeaway: even if a sale is years away, sellers should start preparing now.
Q&A highlights
During the Q&A, Matt addressed the difference between cash flow issues and true profitability issues. He explained that fast-growing businesses can be profitable and still experience cash constraints, especially when inventory needs increase. However, if the business is not profitable, borrowing to fund growth can make the problem worse.
He also reinforced that Amazon sellers should not manage by bank balance alone. Sellers should review profit and loss, balance sheet, cash flow, gross profit, COGS, ad spend, and net profit margin on a regular basis.
When asked about incremental ad spend, Matt emphasized the importance of testing. Sellers need to understand whether paid campaigns are generating new profitable sales or simply capturing sales that would have happened organically.
Final takeaway
The biggest lesson from the session is that profit leaks are often hiding in plain sight. They show up in inaccurate financials, underestimated product costs, inefficient ad spend, fulfillment fees, unnecessary tools, tax planning gaps, and poor exit preparation.
By identifying these leaks and improving each area of the business, ecommerce brands can increase profit without needing to rely only on more sales. Small improvements across the right levers can compound into major gains.
For Amazon sellers looking to grow more profitably, the path starts with better visibility, cleaner data, and a willingness to look beyond surface-level metrics.
