Email newsletters are some of the most profitable ways of building a business online. Let’s have a look at what the data says.
There are 4.26 billion email users worldwide. And Statista claims this number will top 4.73 billion users by 2026. Emails also drive the highest ROI ($40 per $1 spent!) when compared to other marketing channels.
If that isn’t impressive, check this out.
Source: x.com
So unlike popular belief that email is dead, people do love emails. There’s a ‘but’. People love getting emails from brands they love! It’s no surprise that in 2024, most of the top creators have email newsletters as one of their biggest revenue drivers - the same goes for many businesses.
If you’re a business owner struggling to build your email list, this guide will show you how to evaluate a newsletter’s worth to buy one. Let’s dive in!
READ: How to value a micro-SaaS business.
Factors to Consider Before Buying An Email Newsletter
Many people are tempted to buy newsletters due to their subscriber base size without doing their due diligence. However, at Microns, we’ve facilitated the sale of several newsletters, and I can tell you this metric can be misleading as there are more important factors to prioritize. The key factors determining an email newsletter's value are the engagement rate and revenue sources.
1. Age of the newsletter
One thing is imperative when building an online audience - trust. And this isn’t won in a day. It takes time, constant communication, and consistent value delivery to build trust with email subscribers – this makes age an important factor to consider when buying a newsletter.
In essence, older newsletters tend to be more valuable than newer ones. Newer newsletters haven’t stood the test of time, and you can’t guarantee that their open and click-through rates won’t go down. So be sure to find out how long the seller has been running the email newsletter.
2. Email list acquisition strategy
Just like there are several ways of growing a social media following so there are different strategies for building an email list – some of which ensure subscribers stay engaged with a brand and others which only grow the number, but not engagement.
If the seller has a blog or referral program, consistently creates valuable content on social media/email, or does cross-promotion with relevant newsletters, etc., you can be confident the newsletter subscribers will be more engaged. Even if the list is small, this will increase the value of the newsletter’s worth.
Read: Top 5 online businesses marketplaces
3. Email subscriber base
The more subscribers an email list has, the more money it can make. But this doesn’t hold in all the cases. While the number of subscribers is a good metric for determining the value of an email newsletter, it’s not indicative of the newsletter’s engagement rate. A large list may not be profitable if the engagement rate is poor due to sleazy acquisition strategies.
So while the number of subscribers matters, more important factors like the open and click-through rates are worth considering.
4. Open and click-through rates (CTR)
Open and click-through rates are probably the most important factors to consider when evaluating a newsletter’s worth. A smaller newsletter with a more engaged audience is more valuable and profitable than a larger list with a meagre engagement rate. Good engagement means the newsletter has attracted the right audience who finds the content valuable and is interested in the owner’s offering. Less engagement could mean not enough trust has been built.
5. Frequency of sending emails
The frequency of email sends can impact a newsletter’s engagement rate. An email list that receives an email per week will be more engaged than one that only receives emails once per month or when the newsletter owner has a sale promotion. The more emails the owner sends, the more trust and connection they build with their audience. So consider the seller’s consistency in sending emails when buying one as buying a newsletter where the seller hasn’t built a connection with their followers won’t do your business any good.
Read: How to negotiate when buying an online business
6. Source of revenue
Newsletters make money in different ways; through paid sponsorships where people pay you to advertise their products or services to your audience or affiliate promotions where you link to affiliate sites or products. You could also sell your products or services or use a mix of these strategies.
Whichever it is, consider if the revenue is predictable and newsletter has the potential for further monetization. Also, consider the impact the exchange deal (between you and the seller) will have on the audience as some paid subscribers may unsubscribe.
7. Cost of production/profit margins
Aside from operational costs like paying for the email service provider (ESP), there are also promotional costs, content creation costs, the seller’s time, etc. These also impact the value of newsletters, and you need to consider if you will continue with the services they’re already using or not.
Read: Buying a micro-startup as a non-technical founder
How to Evaluate A Newsletter
Here’s a simple formula for measuring a newsletter’s value;
Newsletter valuation = (last 6 months profit + operational costs) x Multiplier
While we recommend using multiples ranging from 4x to 6x for micro-SaaS startups, we use a higher multiplier for newsletters: 10x to 20x.
So if a newsletter made $500 in profit in the last 6 months (with the operational cost factored in), it can be sold for around $5000 on Microns. Keep in mind that other factors like the engagement rate, etc., can impact this value and make it more expensive.
How to Monetize Newsletters
Buying a newsletter is easy. Monetizing it? Not so much. Here are several ways to monetize your shiny, newsletter;
1. Sell your products
This is especially good for niche newsletters. If you offer digital marketing services such as email marketing, video editing, content creation, etc., and you buy a newsletter in the business or digital marketing space, you can sell digital products such as ebooks, courses, spreadsheets, frameworks, and checklists – the list is endless. This doesn’t stop you from selling physical products like your merch, books, or magazines.
Also, if you sell high-ticket coaching or consultation services, a newsletter can be your funnel to selling your service.
Buying a niche newsletter means you already have a teeming pool of warm leads/subscribers to sell to.
2. Paid sponsorship
Getting sponsorship deals where you display your sponsor’s banner or ad at the beginning of your email is another great way of monetizing your newsletter.
Typically, you can get between $30 and $50 per 1000 subscribers. So the more engaged your subscriber base is, the more you can charge. Also, you could feature up to 2 sponsors per issue or increase the frequency of sending out emails to grow your revenue.
Read: Acquire (formerly MicroAcquire) vs Microns
3. Classified ad space
This differs from sponsorships in that, rather than acknowledging someone else’s product or service as your sponsor, you reserve a section at the end of your email where to place ads as shoutouts.
4. Ask for donations
If you’re having difficulty attracting other businesses to sponsor or book ad space in your newsletter, you could ask for donations through Patreon. If your followers value and appreciate what you do, they’ll consider donating.
Read: Best Micro-SaaS Ideas for 2023
5. Sell subscriptions
A good popular example of a newsletter that’s been successful at selling subscriptions is Lenny Rachitsy’s newsletter. This is one of the most profitable ways of monetizing your newsletter as you can consistently make a predictable monthly recurring revenue (MRR). If you’ve got premium or exclusive member-only content to offer, you can sell it as a subscription to your readers.
6. Funnel to affiliate links
If you promote affiliate products on your blog, you can send traffic from your newsletter to the blog. However, promoting affiliate products in your newsletter goes against Amazon’s terms of service, so be careful going this route.
How to grow your newsletter organically
Buying a newsletter is one side of the coin: growing it is the other. We may both agree that building a newsletter is probably the most difficult part of the newsletter business. So here are some strategies you can apply to start getting subscribers for your shiny newsletter.
1. Know your target audience
This is thrown around so often that it’s become trite, but it’s true. The reason many content creators find it difficult to grow is because they don’t understand their target audience. Knowing your audience involves understanding their interests and creating content accordingly. Try to find the deep questions they’re asking and answer them using compelling stories they can relate to.
2. Lead magnets
These days, you can hardly capture any subscriber without a lead magnet. Based on the questions your target audience is asking, create an engaging piece of content like an ebook, checklist, guide, etc., around that topic. The key is that the information you’re providing through your lead magnet should be irresistible enough to compel your targets to exchange their contact details for your piece of content.
3. Create opt-in forms
To offer your lead magnet to your targets, you need an opt-in form. There’s no need to complicate it: simply create one that shows the value of the lead magnet and request contact details: a name and email address. You can take this a step further by doubling your opt-in process: this is sending your target audience an email to confirm their subscription when they opt to receive your emails.
4. Give value
Your emails should be value-rich. If you’re having difficulty consistently creating valuable content for your subscribers, it’s worth having a content team to create your content and a content schedule to ensure consistent delivery.
5. Segment your email list
To increase engagement with your newsletter, segmenting your list and personalizing your content is the way to go. This way, you’re able to deliver relevant content to different segments of your list and increase your open and click-through rates.
6. Encourage social sharing
First, you need to promote your newsletter on social media. Second, you need to make it easy for your subscribers to share your emails on social media by adding social sharing buttons. You can take this a step further by asking your subscribers to share your emails.
7. Cross promotions
Connect with other newsletter owners and request some sort of collaboration like promoting both your contents in each other’s emails. Ensure you prioritize newsletter owners based on relevance, not subscriber size.
Conclusion
So there you have it – the simple formula for evaluating a newsletter’s worth and increasing its earning potential with different revenue streams. On the Microns marketplace, we’ve got tons of newsletters across a range of topics. So sign up to begin exploring the marketplace today to find one that aligns with your business’s goals.
