Free Newsletters Are Better Than Paid Newsletters [Building In Public #9]

A behind the scenes look at the difference in revenue from my paid subscriptions and my free newsletter.

Happy Monday.

This is the ninth edition of my weekly building in public series. I’m experimenting with a shorter, more punchy version of this series. Please hit reply and let me know what you think.

LFG. 🔥

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Free Newsletters Are Better Than Paid Newsletters

I’ve always wanted to have a profitable paid newsletter. Since I started my Substack, I quickly rose to one of the top voices on the platform and I was given a “top sellers” badge.

This is great. I’m thrilled to have earned the trust of so many of my readers. Having paid subscribers is a blessing and I am grateful for every cent that is given to me from my readers.

But, there is a catch.

In terms of the cost / reward ratio, I am learning that the paid newsletter game is not very lucrative, at least not in comparison to having a free newsletter and using it to leverage your own products and services.

Let’s do a comparison.

The Numbers For My Substack Premium

Substack says I make $9,520,000 a year gross.

If you subtract the 10% fee from Substack and the processing fee from Stripe, that leaves me with $8,039.88 a year. (Please don’t check my math).

This is great. I am pretty confident I can ratchet that number up to maybe $50,000 a year over the course of the next 2-3 years. If I keep at it for 5 years, hopefully I can hit $100,000 a year.

Now look, $100,000 a year is a lot of money and it’s absolutely a viable business model. If your main goal is simply to be a writer, and to be paid for your writing, then I highly suggest using this model and sticking with it.

But, if your goal is to make as much money as possible, then I encourage you to use your newsletter as a marketing tool sell your own products and / or services.

The Numbers For My Personal Services And Products

First, understand that when I sell my products and services, I am using more than just my newsletter to promote myself. My sales come from a combination of my newsletter and my YouTube channel.

(Note: All of my social media is dedicated to selling and promoting Copyblogger Academy, so any new subscribers I get for YouTube and Substack is completely organic)

So far, From Sept 9 - Oct 6, I have processed a total of $14,061.92.

A little less than $1,000 of that comes from my Substack premium, so let’s just round to the nearest hundredth and call it $13,000.

If my audience continues to grow, and I am able to continue to make sales in relation to my subscriber count, then it’s pretty clear that I will make much more money by selling my own services and products than I will make by selling premium subscriptions.

The Lesson

You’re better off building a free newsletter and then using that newsletter (plus social media, a podcast, YouTube, etc) to sell premier products and services.

The scalability of premium subscriptions is enticing, because once you create your writing cadence, your input (revenues) can grow at a disproportionate relationships to your inputs (work).

In English, once you nail down your workload, you don’t have to work more in order to make more. This is the dream scenario of any entrepreneur. The problem is the work and time it would take to get here is not worth it for most people.

In contrast, selling a premier product, membership, or service is highly lucrative, because you can differentiate yourself from the market by being different and by providing a unique value proposition. In addition, you can start making real money right away. If you have 1000 newsletter subscribers, it’s completely reasonable to think you can close a $2500 a month deal every other month. At the end of 12 months, that’s $15,000 a month you’re making.

I would take the $15,000 any day.

If you’re a coach, a personal trainer, or a consultant, you have to think of a way to make yourself different from everyone else. If you can position yourself correctly, then your success is simply a matter of time, effort, and willingness to sell.

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What I’m Watching

For whatever reason, clips from “The Imitation Game” started showing up on my YouTube, so I randomly decided to learn more about The Enigma Machine.

I highly suggest watching this video.

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What I’m Reading

Saga is my favorite graphic novel series. For those of you who really know me, you know that I take my graphic novels very seriously.

The writer and illustrator took a 2 year hiatus from Saga and they recently started publishing the second half of the storyline. I finally was able to pick up book 10 and 11 and I’m SO PUMPED TO READ IT!

It’s brilliant. Seriously if you’re looking to get lost in another world, I promise you will not be disappointed by Saga

P.S. - Yes, I have a Saga tattoo.

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In Closing

I’ve been thinking a lot about my family. One of the reasons why I have been making such big changes in my work life is so I can be more present as a father and a husband.

The Little Dude is talking in complete sentences now. The Sweet Girl is climbing up mountains on her own. They were just born.

I have no illusions about the time I get with them. It will go by so fast, it’s already going by so fast.

I’m grateful and blessed that I get to go on afternoon hikes with them. Sometimes, when we are all on the trails, I look at my squad and it makes me heart feel so full I think it will burst

.I lucked out. Wow did I get lucky.

Love you guys. Talk to you tomorrow.

Tim

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