How much do you pay or want to pay yourself every month from your Amazon FBA business? And how much in sales do you need to do to get there?
I currently pay myself $100 a month – $50 on the 5th and $50 on the 25th of each month. I chose that number when I first started Profit First as I wanted to start out small.
In January, I want to start paying myself $300 a month to pay for my new medical insurance payment. I lost my medical coverage from work when I went part-time and now I’m facing a new monthly expense. I did pay for medical with my old job, but since it was deducted out of my paycheck, I never “saw or felt” the medical insurance payment.
But to be honest, I want my Amazon FBA business to support much more than a medical insurance payment. I want it to replace both my old income and my husband’s current income. Until I get to that point, I would at least like to draw enough out of my Amazon FBA business to double up on the house payment and to save for retirement.
My “big” goal for the upcoming year is to pay myself $750 a week or $3000 a month. Now, some may consider that an easy, low number to shoot for. They’ll say that if you go by the 3X Rule, all you have to do is buy $750 of product each week, sell it for $2250 and then you’ll have a $750 per week profit to pay yourself with.
Unfortunately, it’s not as simple as that. Why? Because that $750 of new money needs to pay for others things too:
- Monthly or annual subscriptions
- Prepping and shipping supplies
- Education and training materials
- Future taxes
- Emergency Fund
- Credit card payment if you have unsold inventory that needs to be paid for
So, back to my question, how much do I need to sell (based on the 3x Rule & Profit First) to take home $750 a week?
I agree, that’s a lot of money in sales to take home $750.00 per week. Below is how I come up with the number:
Looking at that weekly sales number is hard for me to grasp. But I’m thinking that as my numbers grow, that I’ll be able to shift some of the Operating Expense money into the Profit and Owners Pay accounts. As I do this, the weekly sales target will go down.
Unless I start hiring help or renting space, I don’t foresee needing close to $4,000 a month for operating expenses especially since most of the monthly subscription fees are a fixed cost. At that point though, I would definitely hire a bookkeeper & a housecleaner!
Do my numbers make sense to you? If not, please advise as I really want to look at this realistically to see if my goal is possible while working alone.
Wishing you all a nice Holiday Season and a Prosperous New Year!
p.s. If you’re interested in learning more about Profit First, please read this blog post about it. It has really changed how I operate my business!