Photo: Undrey (Shutterstock)
Given Substack’s low cost of entry, this is a paid subscriber base almost doubled in the last 12 months, and the news that The top writers make up to a million dollars a yearYou may be wondering: Can I really make a living posting newsletters? If you have an established audience willing to get involved with your content then yes – but the fees aren’t kidding either. Here’s a look at how much you could be making.
How Substack works
Substack is a newsletter tool that allows you to manage subscribers, send emails and track your engagement through an analytics module that logs the total number of clicks, your email open rate, the sharing of your posts and much more. The platform also has a paid subscription model that allows you to bill subscribers a monthly or yearly fee (a minimum of $ 5 per month or $ 30 per year) while also having the flexibility to pay for your posts, make them public, or one Hybrid to choose from both. Another nice feature is that your archive and email lists are portable, which means you can end them if you need to and switch to another platform later.
How you can make money with Substack
With the paid subscription model, calculating your potential earnings is pretty simple: multiply your subscription price by your number of paid subscribers. For example, if you have a steady base of 1,000 subscribers paying $ 5 a month, Substack gives you $ 60,000 a year – before fees and taxes, of course (more on that in a second).
G / O Media can receive a commission
There is also athe Substack Pro Program that pays creators different cash advances as well as a reduced percentage of subscription income generated over a limited period of time, typically 1-2 years. However, it is only an invitation and probably not an option for you unless you are already an established writer with a large following.
Fees and taxes cost you
While it’s easy to see how you can make money using the platform, there are also fees and taxes to consider, which can be significant. Substack reduces all subscription revenue by 10%, and the platform’s financial services provider, Stripe, pays an additional 2.9% plus a 30-cent transaction fee for each subscriber.
According to estimates by the Financial TimesThe fees actually add up a little closer 20.7% of your sales. That said, if you make $ 60,000, your income will be closer to $ 47,580 – before taxes. Federal and state tax rates vary, but with an average tax rate of 27%, you’ll end up looking at $ 34,733 for take-away pay, far from your initial $ 60,000.
In general, expect to lose almost half of your substack income, as popular substacker Lenny Rachitsky confirms in this tweet thread:
The final result
As with social media platforms like Tick tock or YoutubeIf you can’t build an audience on Substack, you won’t be making a lot of money. To really make a living from a newsletter, you’d have to take photos for around 500 paid subscribers who you can keep up to date by offering them frequent, original content for their $ 5 a month. Given that Substack estimates that only 5-10% of a newsletter’s readership are subscribers, that means you actually need a readership base closer to 10,000 people.