# Administrative Expenses
Administrative expenses, also known as overhead costs, refer to the indirect costs incurred in running a business. These include rent, salaries and wages of administrative staff, insurance premiums, depreciation on office equipment and machinery, legal fees etc. In the world of cryptocurrency these expenses are typically associated with maintaining an exchange or wallet service which requires significant resources to maintain secure operations.
Cryptocurrency exchanges must be able to fund operational costs such as hosting servers for trading platforms and customer support services. Since cryptocurrency transactions are digital (and not physical goods), there is no inventory or tangible assets that can be sold when additional funds are needed; thus money required for operating expenses must come from somewhere else. The way most exchanges finance their operating costs is through charging users fees for different types of trades or services they offer (such as listing new tokens). Companies may also commit part of their profits towards covering administrative expenses while others may take out loans if they need more liquid capital upfront.
When selecting a platform to trade cryptocurrencies it is important to consider any additional fees being charged by the exchange (besides just transaction fees). Many exchanges use tiered pricing models where higher volume traders receive discounts on certain types of orders so it’s worth researching what kind of features you get at each price level before committing your funds. Additionally some platforms don’t charge fixed amounts but rather percentages based off order sizes; therefore make sure you understand how much you’re paying in total compared to other competitors before making your choice!
