E-Newsletters: Pathway to Fortune?

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E-NewslettersFor those with some time and patience, an e-newsletter can be an excellent startup business. Although much of our information is now in real time due to social media like Facebook and Twitter, these can actually be a boon to e-newsletters.

The structure of an e-newsletter is basically an article and an advertisement. The e-newsletter is targeted to a specific audience, has an overall theme and is delivered to subscribers’ inboxes on a daily basis. Less frequently, either weekly or bi-weekly for example, an email is delivered that contains only an advertisement. When subscribers click on the advertisement, they are taken to the site and prompted to subscribe to that site’s e-newsletter.

Subscriptions are the key to a successful e-newsletter because the ad rates are determined by the number of subscribers. The cost to gain a new subscriber is between two and four dollars; subscriptions are increased by referrals and paid advertising. Usually, a subscription to one e-newsletter will result in additional subscriptions to other e-newsletters from the same company; this substantially cuts the costs of gaining a new subscriber.

Due to the labor-intensive nature of both the sales and the production processes, usually an e-newsletter is started by more than one person. It may take some initial outlay of capital before an e-newsletter starts to show a profit. However, a substantial profit can be generated in a shorter time than it would take for a traditional business to do so. Sometimes, e-newsletters have been purchased for very large sums by major conglomerates, although this is the exception rather than the rule.

Focusing on increasing subscriptions should be the first step for any e-newsletter entrepreneur. A larger subscriber base will facilitate ad sales because that determines the ad rates. Usually, an e-newsletter should have a subscription base of 40,000 to 50,000 before it pursues major advertisers. For planning purposes, startup e-newsletters should not plan to see a profit for at least a year and should have available startup capital of approximately $100,000 in order to adequately fund the e-newsletter.

The basic strategy for a successful e-newsletter is to plan it, expand it and sell it. As previously mentioned, since social media now plays such a major role in our daily lives, using these tools can actually increase the subscriber base for an e-newsletter and enable it to reach profitability ahead of schedule.

E-newsletters can be highly successful and very profitable. For those with the skill and dedication, they can be a very profitable venture.