I still really don't like the economics of Substack

This is no way to run a business.

Photo by Jp Valery on Unsplash

I really don’t like the economics of Substack.

I’m still on my first cup of coffee and I’m scrolling Substack. I see someone I know, a person who has published multiple books, has a column in a legacy publication, and a 30-40k Instagram following. I’m curious about how they’re using Substack, so I click through. They do an extra newsletter a few times a month for paid subscribers. They’re charging $5/month had have a badge that says “hundreds of paid subscribers” which I believe can cover 100-999.

So, let’s do the math. BEST CASE SCENARIO that person has 999 subscribers which means they’re pre-fee revenue per month is $4,995. After Substack’s fees (10%) + credit card processing fees (I believe averages to almost 4%¹), that is…$4295.70, or $51,540 per year.²

This also of course is pre-tax and pre-other biz expenses that a popular Substack might have, like an editor. If we assume a sole-proprietorship or LLC not taxed as an S-Corp with no business expenses (lol)…