Monetizing a newsletter is way harder than most people make it out to be.

Who would have thought…

Everyone talks about how you can easily make money with sponsorships, affiliate marketing, and subscriptions once you build an audience.

Yeah, I am guilty too.

But the truth is, it takes a ton of work to get to that point. And it ain’t paid.

Here are a few reasons why monetize a newsletter is so challenging:

You need hundreds of paying subscribers to make real money

On platforms like Substack, writers keep 90% of subscription revenue. On Beehiiv it’s 100% minus the monthly fee. Both also exclude payment processing fees.

Still, sounds cool at first. Getting true fans to pay for your words and making a living from it.

But…

If you charge $5/month for your newsletter, you’d need 100 paying subscribers just to clear $500 and some more to net $500.

And where I live, $500 a month is nothing.

To make a respectable $3,000 per month ( a closer estimate of what making a living would mean in many places), you’d need north of 600 subscribers paying that $5 fee.

It takes most writers years to build up that kind of audience. Even free subscribers, not to mention paid ones.

Consider this: only 2-5% of subscribers will become paid subs. So, to earn $500 with 100 paying subs, you’ll probably need a list of 5000 members.

Sure, you could increase the monthly fee to $10. Then you “only” need half of those fans, but that’s a steep price for some words.

Giant empires with streaming services like Amazon, Netflix, or Disney cost less.

Affiliate marketing only works at scale

“Sure, but paid subscription is only one way to go, Burk.”

You’re right. There are a ton more. Like affiliate marketing.

It’s cool stuff. You recommend something and earn for click-throughs.

In theory.

Yes, affiliate links can be a great way to monetize a newsletter, but only once you have hundreds of engaged subscribers.

Click-through rates on links are usually in the low single digits. 2-4%, maybe. That’s nothing. You require a large audience for that to make a difference.

Also, many affiliate (large) programs offer around 3-15% commission on products you promote.

So if you recommend a $100 product and get a 10% cut, you’re only making $10 per sale.

You’d need hundreds of people to buy through your link each month to make affiliate marketing rewarding.

It can be done, but it’s definitely not a get-rich-quick deal.

Sponsors won’t pay you until you have a big audience

It’s hard to attract sponsors or advertisers in the early days of your newsletter.

Most businesses want to see stats showing thousands of subscribers and high open and click-through rates before they’ll pay to get in front of your audience.

The big and credible sponsors, I mean.

So sponsorships aren’t usually a revenue option in your first year of publishing a newsletter.

It took me 1000 free subscribers to get some slightly interesting sponsorship deals and request.

But the mass was still garbage or sketchy.

Paying for newsletter growth is risky

…and expensive (Duh…)

You can try to accelerate growth by paying for promotions and recommendations.

Tools like SparkLoop makes that super easy. And I am a BIG fan of SparkLoop. But not for their paid promotion stuff. I love SparkLoop for their Upscribe feature, a free recommendation widget that can make you money by recommending other newsletters (who did in fact pay SparkLoop to get recommended).

I am sure, paying SparkLoop will help you grow quickly and even get some active and true subscribers, but it’ll cost you thousands. And most people don’t have that kind of money when starting a newsletter.

Also there’s no guarantee those subscribers will stick around or open your emails down the road. Or click on your affiliate links. Or become paid subscribers some day.

It’s usually better to focus on organic growth in the beginning. My opinion!

Paid growth comes with the risk of building an audience that isn’t truly engaged.

You won’t get that money back.

You’re doing a lot of work for free upfront

It takes months or years of consistent writing and promotion to build a sizable newsletter audience.

Whatever sizable means to you. I am picturing something like at least thousands of subscribers, better tens of thousands.

And for most of that initial period, you’re creating tons of valuable content for free without any immediate payoff.

It’s a labor of love at first. Monetization only comes after you’ve put in the hard work to earn a loyal following.

Or you just create crap from the beginning to make a quick. Probably not going to work out.

Speaking of it…

Not knowing if it will work out

When you first launch a newsletter, you have no idea if people will subscribe or if you’ll be able to build an audience over time.

It’s a lovely feeling, no doubt. I love that stuff. Creating a new newsletter, building a new website, designing a new template, etc.

It feels great.

Until it doesn’t…

It’s a risky endeavor that might fail to take off. You have to be willing to experiment and keep trying if your first efforts flop.

There are never any guarantees that all your hard work will pay off in the end.

And who wants to spend months or years on something that never takes off.

The bottom line

Monetizing a newsletter takes significant time, effort, and patience.

In 2024 the internet is full of articles, videos, courses, and paid stuff to “help” you build a newsletter that scales and makes you money.

But most of the time, these products make the money, not the newsletters.

While it might look easy from the outside, the reality is that it takes strategic planning and consistent work to build an audience and revenue streams.

And some heavy investment. Time and money-wise.

It’s not a get-rich-quick scheme, despite what some internet marketers might suggest.

Like any business, it requires perseverance even when progress is slow. But it can be incredibly rewarding if you’re able to grow that thing to a valuable point.

Don’t get me wrong. It’s dope to have a newsletter that makes money, or a blog, or a template business, or an affiliate marketing strategy, or all of the above combined.

But it ain’t going to happen overnight.

Building and monetizing a successful newsletter is a challenging long-term endeavor. Quick money is unrealistic. A lot of money is too.

Then again, it’s never been a better time to do it than now. The industry is booming and I don’t see that stopping anytime soon.

You?