Helping You with Your Amazon FBA Business

Dec 23 Payout: Calculating My Paycheck Amount

In my last post, I stated that my 2016 goal is to pay myself $750 a week.  To do that, I calculated that I need $6429 in weekly sales to meet that goal.

I’ve had a few people message me saying that my numbers are off or that it’s a poor return or not realistic.  So, for this post, I’m taking my real numbers from my most current payout (Dec 9 to Dec 23rd) to see what my paycheck calculates to.

Before I share my numbers, let me share a little info about me and my business:

  1. Joined the Amazon FBA program on April 30, 2014 with no online selling experience and while working six days a week at a regular job.
  2. In August 2015, went part-time at my job.  Since then, I divide my time between Amazon FBA, my blog, caring for my mom and working one or two days a week at my job.
  3. I run my Amazon FBA business 100% on my own.  My husband doesn’t help and I don’t have a VA or employees.
  4. For 4th Quarter, my average time sourcing was 10 hours a week and another 10 hours a week to list, prep, ship and do bookkeeping.
  5. My primary focus was toys in October and November.  On November 28 and in December, I bought shoes in addition to toys.
  6. All sourcing was either through retail or online arbitrage.  However, the majority was retail arbitrage.
  7. I pay for all inventory with a credit card and pay off the balance each month.
  8. I started doing Profit First in August and since then, I transfer a % of every Amazon Disbursement into my business savings account for future expenses (profit check, emergency fund, my paycheck and taxes).

I shared the above information with you because I don’t believe that just giving you my sales number or paycheck amount will do a whole lot of good.

Actual Numbers from Dec 9 to Dec 23
Below is a screenshot from my Seller Central account:

Amazon FBA Paycheck Border

Deducting Out the COGS to Calculate My “New Money”
Every two weeks, I deduct my COGS from my disbursement amount.  I get the COGS from InventoryLab by exporting my FBA Sales numbers into Excel and then eliminating the rows that aren’t included in the Amazon Disbursement period.  The next step is to have Excel give me a total for the “Buy Cost” column.

For this period, my COGS is $1519.04 and I’m left with $1039.94 in new money:

Amazon FBA New Money

As you can see, my numbers don’t exactly fall into the 3x Rule.  Amazon Fees are less and COGS are more than 1/3 of my selling price.

Different Options for the New Money
At this point, what happens with any new money you receive is up to you:

  • Put the full amount back into your business for new inventory and expenses.  *This is what I used to do
  • Put random amounts into your business and household accounts.
  • Allocate the money based on percentages into different accounts.  *This is what I do now

My Plan for the $1039.94
Again, it’s your decision as to what you do with your money.  Some of you may not take a paycheck and some of you may take a large one.  But this is what I’m going to do:

  • Amazon is depositing $2558.98 into my checking account.
  • My COGS is $1519.04.  From this, I need to pay off my credit card balance of $1327.80.  This leaves me with $191.24 to keep in my business checking account for new inventory purchases and expenses.

Then, allocate the $1039.94 into different accounts:

Amazon FBA Allocations

Though I’m not paying myself today, I allocated $363.98 towards my future paycheck.  This is roughly 10% of my sales figure.

As the $363.98 is for a 2-week period, it calculates to $181.99 in weekly pay ($363.98/2 = $181.99).

I am short of my $750 weekly goal.  To get there, I need to improve my ROI %, get sales up and/or allocate a smaller amount to my other funds.

I hope this makes sense to you and clears up how I came up with the $6429 sales figure in my last post.

As always, I welcome any questions or comments either here, in email ( or on my Facebook Page.

Happy Holidays,


{ 11 comments… add one }
  • Ree Klein December 24, 2015, 10:23 pm

    Hi Diana,

    That is a very clear description of how you are handling your business finances. I like that you are being very conservative and are putting the business ahead of taking draws for personal living expenses.

    I calculate things differently than you do but I don’t think there’s a real “right” way to do it. It’s whatever works for you and your business. More important is to have a plan, work the plan and tweak it as needed. You’ve got that nailed!

    I’m really enjoying your blog and it does make me think about my own business. Thanks for putting your world “out there” for all of us to learn from. That’s a brave and gracious thing to do!

    Happy Holidays and I can’t wait to see what 2016 brings 🙂

    • Diana December 25, 2015, 3:30 pm

      Hi Ree,

      You are absolutely correct in that there isn’t a “right” way to do it. For me, the main things are to stay out of debt and not go from “payout to payout” without a savings in place.

      Thank you for stopping by and commenting on my blog. I’m very happy you have a blog too and look forward to following you on there!


  • Michal December 26, 2015, 10:46 pm

    I know you live in Washington, as do I. I am in Puyallup. My question for you is how did you set up your business license? What I am wondering is did you set your business license as retail or wholesale? I was talking to my accountant and she suggested wholesale, but she is not familiar with FBA. So, I’d appreciate knowing how you did it.

    • Diana December 27, 2015, 5:05 am

      Hi Michal,

      I went to the Wash Dept of Revenue website and setup my business license there. To my knowledge, I’m setup as Retail. I’m not a wholesaler and at this time, do not buy or sell anything wholesale.

      I’m out of town right now. When I return home, I’ll see how I filled out my original application and let you know for sure how I did it. But right now, I would say Retail.

      Let me know if you have any other questions. Once I return home and have access to my records, I may be able to give better answers.


      • Michal December 27, 2015, 6:34 pm

        Thanks for the info. I thought the accountant’s idea of wholesale seemed off base. I look forward to hearing how you set it up.

  • Buffy December 31, 2015, 7:43 pm

    Thank you so much for posting the actual breakdown of each step. I am a very visual learner and this helps me make sense of how to process. I also got great benefit from how you allocate by %. Makes total sense.

    • Diana December 31, 2015, 11:42 pm

      Hi Buffy,

      I’m glad the post helped!

      I did notice that I made a mistake because I forgot to subtract out the sales tax that I collected from my disbursement.

      Happy New Year!


  • Mike Maricich January 20, 2016, 11:08 pm

    Great Breakdown, Love that you make post about the back end of the business. I think it’s often over looked and makes people feel discouraged win they aren’t making the profits they thought they would.

    • Diana January 21, 2016, 12:33 am

      Hi Mike,
      With my blog, I’m just trying to show others that the sales number alone and per-item profits doesn’t give the full profit picture of a business. Sometimes I don’t think that newer people subtract out their other expenses (subscriptions, supplies) when calculating their profits.

      As you know, I’m getting into shoes and seeing per-item shoe profits of $20 or $30 is great, but I still need to have a high-enough volume to be able to get to my $750 weekly paycheck goal.

      Thanks for stopping by and commenting! I really appreciate it.

  • Joe February 21, 2017, 1:25 pm

    Are you using cost of good sold or cost of inventory?

    • Diana February 21, 2017, 2:00 pm

      Hi Joe,

      I’m using cost of goods sold.



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About Diana

I am working towards creating a full-time income by selling on Amazon. It's a lot of work but very fun! If you're interested in selling on Amazon, be sure to follow my blog as I'll be providing you with lots of tips!

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