Buying and Selling Newsletter Businesses

Print news might be struggling on its last legs but online newsletters are quite popular. A good newsletter put together by niche specialists providing expert information can find itself in very high demand.

Many people are more than happy to pay for a good weekly or even monthly newsletter. Real estate, finances, market trading, growing a business, and making money online are just some of many examples of topics that will always have a high demand from beginners looking for expert advice.

How viable is a newsletter business? What should you look out for when purchasing a newsletter? Where can you find newsletters for sale? I will cover all of that.

Let’s jump into it!

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Where To Find Newsletters For Sale? 

Two top names get mentioned when looking for the best place to buy a newsletter business.

Duuce Newsletter Marketplace Review

Duuce is the premier newsletter marketplace.

There are plenty of newsletters in varying niches that you can consider acquiring. Their directory of newsletters for sale is easy to navigate and gives important base information for each newsletter, such as:

• The number of subscribers (List Size)
• Monthly revenue
• Category
• Founding date
• Asking Price
• Open rate
• Technology stack
• Traffic channels
• Monetization details
• Future growth potential
• Assets included in the sale
• Newsletter description

Right now this is probably the best marketplace for buying or selling newsletters.

Flippa Review

Flippa is a place where all types of online businesses are up for sale. There isn’t a specific category for newsletters so this will require some digging to find good potential pickups.

Flippa is also an unvetted open marketplace, so make sure of any due diligence before making a purchase.

Make sure to read our review of Flippa, and also the typical types of scams found in that marketplace.

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How To Buy A Newsletter (9-Step Process)

The steps to undertake during an acquisition aren’t complicated but there are many nuances.

Here are the major steps:

1. Negotiate the terms of the acquisition (price, earn outs, how much cash upfront, etc)
2. Sign a Letter of Intent (LoI)
3. Perform deeper due diligence
4. When happy, sign an Asset Purchase Agreement
5. Setup Escrow and deposit funds
6. Perform the newsletter transfer (transfer website, email list, social media, assets)
7. Inspect all assets, logins, and transfer of knowledge
8. Release funds if happy with the transaction
9. Receive any post-sale support from the seller

That’s really it.

We will break down the details of due diligence, valuation, risks, and monetization below.

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4-Step Due Diligence Process For Newsletter Acquisition

Due diligence is important before buying any online business and newsletters are no exception. Crucial information can tell an investor whether a newsletter is priced reasonably, a steal, or has enough red flags to warrant walking away.

When doing due diligence, make sure to get in-depth information by answering these four questions before making any newsletter purchase.

1. How old is the newsletter?

Age matters a lot. Is this a newsletter that has been around for years and continues to have a solid response rate? Or has it exploded at a few months old and has the potential of being attached to a fad?

Newsletters are more “intimate” as they reach an individual’s email inbox. It takes time to garner trust of the end-user. Therefore, newer newsletters are less valuable than older ones that have not sent many emails. 

Takeaway: Make sure to ask when the first newsletter/email issue was sent to users. This is key information.

2. How often were subscribers sent emails?

Was this a quarterly newsletter? Monthly? Weekly? Changing the frequency can have benefits in some cases, but it can also be very detrimental. Especially with audiences set in their habits.

This information is also going to give insight into how much work can be expected to keep the newsletter at its current level. Or the work required to expand it.

Takeaway: In the newsletter business, consistency is key. If an email list has not been sent in a while, it’s a dead list. It’s incredibly difficult to revive a dead email list. 

3. What are the open and clickthrough rates (CTR)?

How users were obtained can tell a lot about the type of audience the newsletter business brings with it. Were they bought from another list? Gained from a promotional giveaway? A sign-up form on a blog?

For example, users obtained through a promo giveaway tend to have low open and CTR. This is because they signed up not for your newsletter but just to get the giveaway.

On the other hand, subscribers obtained through word-of-mouth or organic search traffic will have the highest statistics. This is due to the intent of the user.

Takeaway: Ask the seller of the newsletter to provide screenshots of open and CTR rates for all issues of emails sent. This information can be easily obtained through their email service provider (e.g., Mailchimp, Campaign Monitor, Aweber).

4. Where were the users collected? 

Was this a signup from a personality-driven blog? Was it an informational niche site that then just didn’t do much with the list?

Understanding where the email list came from will help a buyer determine how likely that list is to be interactive, neutral, or even hostile to a new owner.

That’s extremely important when trying to figure out just how valuable the existing newsletter’s subscribers are likely to be.

Takeaway: Understanding the analytics of the users will help you understand the value of the list.

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How To Value a Newsletter: Valuation Process

Figuring out the value of a newsletter isn’t as easy as it is for a niche content website, e-commerce, or SaaS business. 

However, there is a generic formula that can be used to value any digital online business. Let’s go over that.

Make sure to try out the business worth calculator.

Generic Valuation Formula

For typical online websites, there is a formula that the industry uses.

The formula is as follows:

Sale Valuation ($) = Last 6-Months Profit ($) x Monthly Multiplier

To do the valuation, one needs to calculate the average profit of the business over 6 months and multiply it with a multiplier that is the industry standard. 

The typical multiplier ranges from 35X to 40X for content-based websites.

However, newsletters are more long-term assets with a protective moat. A healthy newsletter deserves a higher multiplier than a typical content site that generates traffic via organic search.

To calculate profit, make sure to take into consideration operational costs which include email service provider subscription fees, hosting fees, domain fees, etc. You should exclude any growth-related costs, such as if the owner purchased advertising on a third-party platform to grow the newsletter; these are one-off growth costs and should not be factored into valuations.

Takeaway: The typical multiplier for newsletter-based businesses will be in the range of 40X to 50X multiple depending on age, open rates, CTR, niche, and list size.

A newsletter has specific elements that other businesses, like content sites, do not have. Let’s get into those.

1. Number of Subscribers

The number of subscribers isn’t the “end-all, be-all” when it comes to putting a value on a newsletter but it is one of the most important factors out there. High subscriber numbers are a good sign that the newsletter has serious potential because of audience size.

The number of subscribers matters, but it also needs to be taken into consideration with the open rate for a full picture.

2. Open Rate

An audience of 1,000 followers with a 50% open rate is better than a newsletter with 10,000 emails but a 1% open rate.

The open rate is important not only because of average active engagement, but it also gives an idea of how valuable the email list being bought with the newsletter is, as well as the passion of the people signing up for the newsletter.

Unopened emails don’t do any good and they certainly don’t make any money.

Along with the number of subscribers, this is one of the most important factors for valuation. 

3. Source of Revenue

How does the newsletter make money? Is it all driving traffic to a website where display ads and affiliate links make all the revenue? Is it through paid sponsorships?

There are many different ways to monetize a newsletter, but some revenue sources are easy to replicate while others might not come with the newsletter.

Keep these three things in mind when looking at buying a newsletter:

• Understanding how the list is currently monetized
• Looking at how a buyer could monetize that list
• Look at how jarring the transition might be to current subscribers

4. How Much Revenue?

The amount of revenue being made is an important factor. But also, the context of how the revenues are made is important.

A lot can affect revenue numbers. Some people are just better at monetizing than others. Low revenue size could be a red flag, or it could be an opportunity for an investor who has a good plan for monetizing that newsletter well.

5. Revenue Potential 

Has the current newsletter maxed out the potential revenue from its email list or is there room for more?

On top of that, some niches are very narrow while others can be grown to a huge audience. 

Looking at the potential for growth in subscriptions and revenue is important to make sure a buyer is matching a newsletter for sale with what they can actually do.

6. Niche Industry

Some industries are simply more valuable than others. Some are also more niche. 

Looking at the industry that a newsletter covers can help give buyers the right idea on how to evaluate the overall potential value of a newsletter.

7. Fresh Activity

Having large numbers is great but if the newsletter went on hiatus for a year or used to publish monthly and now publishes quarterly – that is an issue.

Fresh activity means a more engaged email list, a more engaged audience, and a smaller likelihood of mass defections with a new owner.

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2 Major Risks When Buying a Newsletter Business

While there is an enormous upside to buying a newsletter, it isn’t without its share of potential risks. 

Watch out for these three potential risks before finalizing the sale on a newsletter business. 

1. Users Don’t Know Who You Are

If the newsletter was attached to a personal blog or carried by the force of personality of the original author, a buyer might find a sold email list unresponsive to a new owner. 

That really defeats the potential value that a newsletter brings to the table for an investor.

This risk can’t be eliminated, but it can be mitigated with proper due diligence and making sure your first issue of the newsletter to the email list features a carefully crafted email introducing yourself, being open about the transfer of ownership, and sharing your excitement to be a part of (and grow) the current newsletter community.

2. Potentially Violating TOS

Looking at the stated Terms of Service is crucial. When many newsletters are started, the founder isn’t thinking of a sale down the line. Why does this matter?

Because many use a template of a basic TOS which almost always includes a promise not to sell information of the users. This would include a built-up email list. 

Read the TOS. It’s a very important part of due diligence when looking to buy a newsletter because you don’t want to make a purchase and realize it’s not legal to get the email list.

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How To Monetize A Newsletter? 7 Ways

There are many ways to make money with a newsletter. Many of these methods can be used simultaneously.

Here are seven of the most popular methods.

1. Offer Products

This can be in the form of merchandise, digital ebooks, or products that you make/produce that are relative to the niche the newsletter is in. 

An email list of people passionate, or at least interested, in the topic of the newsletter, means a lot of warm leads who are going to be more inclined to make a purchase.

2. Sell Direct Subscriptions

A newsletter can be a great funnel for direct subscriptions whether for software, a members-only forum, or some other consistent subscription setup. 

This is great because it’s a recurring income stream that can be promoted very easily in a quality newsletter.

3. Funnel Traffic to Ads & Affiliate Links

You want to be careful with affiliate links in a newsletter (it’s against Amazon’s TOS, for example). Make sure to read the TOS or ask your manager at the affiliate program you are wanting to promote

In the worst case, if you have good CTRs, you can direct newsletter traffic to good blog posts or website articles that include affiliate links.

That’s an easy way to use the newsletter to make money from the website.

4. Sponsors

You can have a dedicated sponsor for each email newsletter you send out. Usually, sponsors will provide a banner image, or ask to include their logo plus a descriptive text of their offer. You just have to place it in your newsletter (usually towards the start of the email).

You can then get paid a fixed fee that is negotiated for each sponsor.

5. Classified Ad Space

Classified ad space in a newsletter with a large audience will be in high demand. Selling ad space in an email newsletter can be a very lucrative way of monetizing.

Usually, you can include 2-4 classified ads in text form towards the end of you newsletter. These are essentially shoutouts and are much cheaper than full sponsorships. 

6. Use as Funnel to High Ticket Courses or Coaching

For those who offer coaching, very high per-hour services or an expensive course, a quality newsletter can be part of a great funnel system to get more eager customers to those higher earning options.

7. Donations

Offer enough quality and you may have people willing to donate. This could be done via a donate button and/or services like Patreon.

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Updates To This Article

Here are the past updates made to this article:

• November 7, 2023: removed LetterXChange marketplace. Their website does not load anymore. They may be out of business.
• November 7, 2023: adding a section on the process of actually doing the transaction of acquiring a newsletter

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Actionable Takeaways

Newsletters are an intriguing online business model that can add a lot to an existing online business or even stand on its own as a major potential moneymaker.

Some important takeaways to keep in mind:

• Due diligence is crucial
• There are many monetization methods for a newsletter, and having a plan is important
• While newsletters can be powerful on their own, they are even stronger as part of a larger online business

Keep this information in mind and any potential newsletter investments are that much more likely to be a good profitable deal.