Methodology

This page explains how the Newsletter Profitability Calculator estimates revenue, costs, and profit, and how it ranks newsletter platforms. All formulas are transparent and implemented in open source code.

Revenue model

Monthly revenue is the sum of four streams, each calculated from your inputs:

Sponsor revenue

sponsorRevenue = (listSize × openRate × sendsPerMonth / 1,000) × sponsorCPM

sendsPerMonth = sendsPerWeek × 4.33 (average weeks per month). CPM means cost per 1,000 opens. Typical niche newsletter CPMs range from $20–$50.

Paid subscription revenue

paidRevenue = listSize × (paidConversionRate / 100) × paidPrice

Conversion rate is the percentage of your total list that converts to paid. Typical is 2–5% for engaged audiences. Only calculated for "paid" and "hybrid" business models.

Affiliate revenue

affiliateRevenue = (totalSends / 1,000) × clicksPer1000 × (conversionRate / 100) × avgCommission

totalSends = listSize × sendsPerMonth. Affiliate clicks per 1,000 sends, conversion rate, and average commission are all user-editable.

Direct ad revenue

A flat monthly amount you enter directly — for any revenue not captured by the above streams.

Cost model

Monthly cost = platform cost + operating costs.

Platform costis determined by matching your current list size to the provider's published pricing tiers. We use the cheapest paid plan that fits your subscriber count. If your list exceeds all tiers, the highest tier is used.

Operating costs are the sum of your entered values: growth spend, content/design spend, contractor costs, website/domain, and other monthly costs.

Ranges: conservative, base, and upside

We do not present single-point estimates because real results vary. Instead, we show three scenarios:

• Conservative: 65% of base revenue
• Base: Your inputs as entered
• Upside: 140% of base revenue

These multipliers are intentionally simple and documented. They account for variance in open rates, sponsor fill rates, and conversion rates that real newsletters experience.

First-year projection

The first-year estimate uses monthly compounding growth: each month, your list size grows by your stated monthly growth rate, and revenue/cost are recalculated at the new list size.

listSize(month N) = listSize(month 0) × (1 + growthRate/100)^N

Break-even month is the first month where cumulative profit (base case) turns positive. If it never does within 12 months, we report "Not in year 1."

Platform scoring

Each provider has editorial scores (1–10) across eight dimensions: beginner-friendliness, automation, paid newsletter fit, sponsorship fit, affiliate content fit, design flexibility, monetization strength, and list growth tools.

The recommendation engine combines these with your answers:

• Scores are weighted by relevance to your business model (e.g., paid fit weighted higher for "paid" model)
• Cost fit is calculated from platform price vs. your budget
• Priority boosts apply based on your stated main priority
• Preference flags (e.g., "want automation") increase relevant dimension weights

Why results are ranges

Newsletter economics depend on factors we cannot measure: your niche, writing quality, promotion effort, sponsor demand, audience engagement, and market timing. Ranges help you plan for realistic variance instead of anchoring on a single number.

Important disclaimers

• All pricing data is based on published rates at the "last updated" date shown on each provider page.
• We do not scrape or call live pricing APIs — always verify current prices on each platform.
• This is not financial, tax, or legal advice.
• Past newsletter performance does not guarantee future results.
• Provider scores are editorial assessments, not objective measurements.