When Should You Go Full Time With Your Amazon Business? – 7 Critical Considerations Before Making the Leap

By Nate McCallister   
Last Updated on October 12, 2022

My memory is not that great. Due in part to a combination of football injuries before targeting rules were enforced and skateboarding while thinking helmets were for nerds.

Some memories have lasted, though. 

One of the strongest I have is from the day I quit my full-time job to sell on Amazon full time. 

It was an overcast fall day in Peachtree City, Georgia. I sat in a Books-A-Million staring at my laptop screen. I had never analyzed my seller central dashboard so critically. Sales were no longer fun, they were mandatory. 

I was trying to work, but I was feeling like I had just drank a bottle of NyQuil and chased it with 3 tall Red Bulls. A simultaneous feeling of total dread and pure excitement.

I had escaped. But I hadn't really, yet. I reached the point where I felt I was losing money doing a job I didn't like. So I jumped ship. 

My Amazon business and a few other side hustles I had finally tipped into the $10,000/month profit range. Far more than the $3,700/month I was making as a manager at a Yarn Mill in Southern Georgia. 

There was a long road ahead of me that would eventually make me feel like a genius or a totally irresponsible moron.

There was no going back. It was Amazon FBA or bust. 

My story has a happy ending. But if there's one thing I've learned in business, luck has much more to do with it than anyone wants to admit. 

How I left my business is NOT the way I'd recommend others do it. In this article, I want to share a few insights that I think all Amazon sellers should consider BEFORE making the leap from part time to full-time seller.

Going full-time is not for everyone and being part-time can be a blessing in disguise. Read the following points carefully and don't assume that I'm guiding all of you to full-time selling. Some of you, I'm trying to talk out of it. We are all different. There is no universal 

#1 Review Your Responsibilities to Others

My apologies that this is common sense, but it's absolutely the most important factor in this decision. 

Everything is different when we have other people relying on us financially.

Dependent taxes meme

It's one thing to "cut loose the ships" when you're single and can live on Ramen noodles and couch surf while you grind away, but that isn't a responsible move for people (like myself) who have mouths to feed. 

Again, please forgive me for stating the obvious, but if you have children or people who rely on you to make a stable income, you need to be extra sure that you've checked all the boxes that are to come in this post. 

#2 Review Your Monthly Living Expenses 

If my money making skills are a 9, my money managing skills are a 3. 

My goal has always been to make enough money that I don't have to check my bank accounts regularly. 

I escaped despite my bad money management, but you shouldn't risk it. Again, I was lucky and luck doesn't get spread out evenly in life. 

However, this isn't what I recommend to others, and it isn't what I did when I first when full time selling on Amazon. 

As much as I disagree with Dave Ramsey, he is pretty spot on in analyzing your current financial state before doing anything else. 

#3 Review the Cost of Benefits

The greatest tool businesses have for keeping their employees from leaving is their health insurance benefits. My insurance costs immediately went up by a multiple of 4x. 

Please, do not jump into selling full time without considering your health insurance. 

A disturbing number of self-employed people remain uninsured compared to those employed in the private or government sector.. If you live in the United States, our healthcare system is already so expensive, even with insurance. You shouldn't risk not being insured or being underinsured. 

#4 Have Clear Inventory Spend Minimums

One beauty of being a part-time seller is that you have no pressure to earn any certain amount of money. 

When you go full time, the heat is on. If you don't have a plan and the discipline to act on it, you will end up back at your old job (if you're lucky enough that they take you back). 

If your monthly expenses are $4,000, you need to earn $4,000 profit per month just to keep the lights on. However, Amazon selling requires revolving capital, so $4,000 profit in Amazon payouts won't "keep you afloat" if you don't have more capital to reinvest. It will have you on a path to going out of business. 

So, we need to earn enough extra that we can reinvest profits to become next month's revenue. 

So, how much do you need to invest?

I made a super basic free worksheet that you can use to calculate this number quickly. 

Minimum Spend Calculator ---

You'll be prompted to make a copy. This will allow you to edit it. 

Only edit the text that is in gray. Don't touch the text that is in yellow. 

There is a second tab called "simplified" that will do the same thing, but it allows you to calculate just based on the desired monthly net profit and your expected average ROI.

Simplified calculator

But let's crunch the numbers here anyway, so it makes more sense.

Let's assume a wildly conservative number of 15% ROI on each dollar you spend on inventory. Arbitrage sellers see higher ROIs than this overall, but this will give us wiggle room for error and items that don't sell as quickly as we expected.

The formula for monthly spend minimum is...

Average ROI * Monthly Inventory Spend = Desired Net Profit

or Monthly Inventory Spend = Desired Net Profit / Average ROI

With 15% ROI and $4,000 in net profits, the formula would look like this...

Monthly Inventory Spend = $4,000/.15

Monthly Inventory Spend  = $26,667

That spend per month amount should be the absolute minimum that you have in your bank account before embarking on your full-time journey. To keep yourself from losing sleep, I'd suggest having a minimum of 3X this amount ready to go in case of emergencies. 

NOTE

There are other variables at play here, so use these calculators as tools for rough estimates. You will want to consider things such as taxes withheld, long-term storage fees and other unplanned expenses. You are welcome to plug and chug numbers or add to the worksheet as much as you want. It's yours to do what you wish for. 

#5 Understanding Tax Liabilities

accounting-memes--------x--- ---

People will say "you pay so much more in taxes as an entrepreneur," but that's really not a completely fair statement. 

An employee who makes $40k in wages will often pay more in taxes than an entrepreneur who experiences the same $40k lifestyle. That statement will make a lot more sense once you've been an entrepreneur for a while.

There are just so many more tax deductions that business owners get. 

The moaning and whining you hear from entrepreneurs is usually a result of them paying so much more relative to their new earnings. 

The big factor, though, is that most employees have their taxes pulled out for them each paycheck. 

#6 Understanding Suspension Risks

We did a poll in 2019 asking sellers how many of them had been suspended. A whopping 22% said they had been suspended at least once. 

Amazon suspensions

I've been suspended before. Most of my friends have been suspended before. In fact, I do not know someone who has sold for over 5 years who hasn't been suspended for at least a day or two. 

Can you handle this if it happens?

Even if you're following the rules, suspensions are a tragic inevitability of selling on Amazon. Most sellers get back though. If you're truly following the rules, your short suspension for a used sold as new or suspected inauthentic complaints will not keep you down forever. 

They are costly, though. Even you do them yourself and don't pay a pricey agency to write it for you, every day you're suspended is profits lost. 

#7 Understanding the Pressure of Being Alone

No matter how much you disliked your job, there will be moments you miss not being completely responsible for every facet of your business. Sometimes it's nice to know that you have other people around you to lighten the weight of inevitable chaos. As you start your full time Amazon journey, you will be the captain of the ship. Are you ready for that? 

E-Myth Revisited 3d transparent


The business that was supposed to free him from the limitations of working for somebody else actually enslaves him. Suddenly the job he knew how to do so well becomes one job he knows how to do plus a dozen others he doesn’t know how to do at all.” ― Excerpt from The E-Myth Revisited by Michael E. Gerber

Conclusion

I don't care if you go full time or stay part time. 

I do care, though, that I've given you the best information possible so you can make the best decision for you and your family. 

If you think I have or think I missed something, let me know down in the comments!

About the author, Nate McCallister

Nate is the founder and main contributor of EntreResource.com and the author of Evergreen Affiliate Marketing. He is a lifestyle entrepreneur who spends his time building businesses and raising his four kids, Sawyer, Brooks, Van, and Lua, with his beautiful wife, Emily. His main interests include copywriting, economics, and piano.

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