Revenue vs. Profit

Howdy, My Friends,

Sometimes on the internet we see the various affiliate post their accounts in an attempt to convince you that the internet income is real and that it’s rightfully working for them. There is no doubt, that the figures revealed are by far largely true.

But what is it that they show, Revenue or Profit. It is important to know the difference as there may be cost that needs to be factored in the whole scheme of things.

Revenue is income earned before cost is taken into consideration. Where as profit, sometimes called net income or even net revenue is income after cost is taken into consideration. Lets look at this example.

Scenario	A	B
Profit Statement	$	$
Revenue	2,000.00	2,000.00
Cost:
Advetisement	-1,000.00	-1,800.00
Tools	-300.00	-300.00
Net Profit/(Loss) before tax	700.00	-100.00
Taxation	-175.00	0.00
Net Profit/(Loss) after tax	525.00	-100.00

So, as we see in the calculation above the revenue of $2,000 in both scenarios A and B is the raw sales so if you were to sell on commission a $4,000 item and the commission rate is 50%, whenever you make a sale your commission will be $2,000.

Now for you to promote the product most likely you will have to advertise and pay your monthly subscription for the tools that you are using; that plus other cost to be in business. As shown in both cases depending on your advertisement cost you may end up with a net profit or a net loss. Scenario A yields a profit of $525 whereas Scenario B yield a loss of $100.

All is not Lost Though

But what if I tell you that there is away to eliminate the advertisement cost, yes there is away to do so, the Video Mastery Class hosted by Aaron Chen teach you all about that, by posting you-tube videos with the right content you can get free traffic and eliminate most if not all of the advertisement costs.

Here is what scenario A could look like.

Scenario	A
Profit Statement	$
Revenue	2,000.00
Cost:
Advetisement	–
Tools	-300.00
Net Profit/(Loss) before tax	1,700.00,
Taxation (25%)	-425.00
Net Profit/(Loss) after tax	1, 275.00

Please note that I use a 25% tax rate, this may be different depends on where you are.

So whenever, you see these flashy figures before your eyes again no real need to doubt, but listen to hear if it is PROFIT or REVENUE. Note that profit is what you keep for yourself.

Have a blessed day 😊

Collin

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Here is to your successful business online

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