Strategize long before you monetize.
I don't want to discourage you, but I want you to realize that for the great majority of newsletters, monetization is byproduct, not the product.
I get all kinds of questions about monetizing email newsletters, so I'll make some generalizations and say: don't worry about it yet. Publish because it's good for you. Publish because it helps you think clearer. Publish because you want to build relationships with like-minded people.
If you're a business: publish a newsletter to build trust with your customers and authority in your industry. That’s all the monetization you need if you already have products or services.
It's the same advice I'd give for podcasts or blogs: you can make money directly with them, but it's a pittance compared to the benefits of doing it as normal part of your lifestyle.
Of course, some newsletters are built specifically for monetization, and some have been sold at astronomical prices (DailyCandy sold way back in 2000 for $125 million). But those newsletters are built for large-scale commerce, and they are the exception to the rule. Most newsletters are small and specialized. Unfortunately, this majority is almost never addressed as the majority.
If you really want to monetize directly, options for small newsletters can include direct sales, ads, subscriptions, memberships and donations.
Direct sales are the most common form of monetization. Have a book, course, or consulting to sell? Chances are, your newsletter is major part of that strategy, if not the most profitable part. A light touch is still the key here. Provide WAY more value in your content before you make an ask of any kind. It really has to be worth the reader's time. Most authors I read have a small sentence in their newsletter to check out their latest book. It's small because that's not the true point of the newsletter, but if the reader really wants to know, they can find it.
Ads are almost always a bad idea in a newsletter that's about building relationships. What if, every time you had a conversation with someone, an ad was inserted? You wouldn't have many second conversations with people. An exception here is when a company sponsors someone’s newsletter for an entire year and has a tiny mention in each issue. Still, I believe that ultimately can have a censorious effect on the content, which is why I haven’t had an ad on any of my newsletters since 1999. Sometimes, you have to learn the hard way.
Subscriptions are hard to pull off, but if you have a large audience or valuable (usually financial, established-authority, or work-related) information, they're absolutely possible. The downside is burnout, because if you commit to a regular paid newsletter (or additional content to a free newsletter) and you only get 10 takers, you've just signed up for a lot work for very little pay. I've seen newsletters limp along like this for years, devoted to making their fans happy and convinced more people will sign up if they just market themselves better. Most of the time, there isn't a big paying market for small newsletter content in itself.
Memberships are a lot like subscriptions, but can also include audio, video, and physical products. I like memberships for individuals publishing newsletters, as the publisher has much more freedom in what's made available, and much more control over how the reader experiences the content (no lock-in for either party to someone else's scheme). Restrictive membership models do exist (like Patreon) and they’re currently very popular with readers. But be wary of any service that can yank away all your members on a moment's notice without recourse. I've heard much better things about Memberful over the years, and there are many do-it-yourself models that can be baked-in to your main website these days that give you total control (usually at the cost of convenience).
Donations rarely bring in much for amount of space devoted the pleas. But they are the easiest to set up, since nothing is expected in return. I’ve only seen donations work really well in one case and it was because a celebrity was involved.
If you’re just starting, focus totally on your readers and they will tell you what they want/need. If it makes sense to you, you can start a business around that need. That is business as a byproduct and that’s where newsletters and podcasts shine.
If you’re an existing business, work on building stronger bonds with your current customers, find out what they need, and branch out to like-minded new customers.
If you build an audience to serve that audience, monetization will present itself. You don’t need to chase it. You don’t even need to accept it if you don’t want the added responsibility. But the opportunity will eventually arrive if you give your readers enough time and attention.
Check out the rest of this month’s posts on creating email newsletters.