Iman, an Amazon FBA seller with $5M in annual revenue, explains why high sales don't mean wealth. He takes home $10-20K monthly while reinvesting profits into inventory, but a business generating $100K monthly profit could sell for $3-4M. Real money comes from the exit, not the operation.
So you don't actually make life-changing amounts of money in any business you start unless you sell that business. Let me put it in perspective. My name is Iman. I run multiple Amazon FBA brands that I own myself, right? This year alone, I will do $5 million in revenue, and revenue does not equal profit. And even the profit that I so-called claim as 20% profit margin, I have to reinvest over and over and over again. So again, put it in perspective. I made over $410,000 in the month of May in revenue. On my P&L sheet, that shows up as right around $90,000 in profit. All right. But I just had to go ahead and wire a $250,000 wire to my supplier to make more inventory because I'm still in the growth phase of my business. So next year I want to make more than $800,000 a month in revenue and hopefully go ahead and get to $1 million in revenue per month eventually. But I can't get there if I don't reinvest back more and more money into my business. So as I start growing my business out, the more money I actually put into my actual business— and this is how every business is run until you actually sell it until you're able to liquidate that actual money. Because right now, let's say I get to $100,000 per month in profit, right? And making that per month, every single month, I can finally sell my business anywhere between $3 million to $4 million. And I'm able to go ahead and liquidate that, actually feel that, right? All right now, all I'm doing is going ahead and paying myself a livable wage. Right? So maybe going ahead and paying myself $10,000, $15,000, $20,000 every single month, which again, it's a fantastic type of lifestyle, but I can't go ahead and flaunt it, go ahead and buy all these supercars, because I have to reinvest back all of that money every single time, and it hurts, trust me.
