How Substack Operates?
You Might be Inquisitive
Some have wondered how my blog works. It is run by Substack and there are those who wish more information on this organization and how the finance operates if they do decide to become paid subscribers. I asked Substack to give a word of explanation and here is their answer:
“Substack: Substack is a platform that empowers writers, podcasters, and creators to publish directly to their audience and monetize their work through subscriptions. It offers a seamless integration of blogging, newsletter sending, and payment collection all in one place, allowing creators to focus more on content and less on the technical aspects of distribution and monetization. Substack's model promotes a direct relationship between creators and their audience, free from ads and algorithms, ensuring that your voice reaches your readers without interference.
Stripe: Stripe is a comprehensive payment processing platform used by millions of businesses across the globe, including Substack. It facilitates the secure handling of transactions, allowing creators to accept payments online with ease. Stripe's robust infrastructure supports recurring billing and provides detailed financial reporting, which is crucial for managing subscriptions effectively. Its reliability and security make it a trusted choice for handling sensitive payment information, ensuring that both creators and subscribers can transact with confidence.”
And here is their comment on how the payments work:
“When you receive payments from subscribers on Substack: - Substack's Fee: We take a 10% cut of each transaction. - Stripe's Fees: Stripe charges a credit card fee of 2.9% + $0.30 per transaction. For recurring subscriptions, there's an additional Billing fee of 0.5%.
So, for each transaction, the total fee deducted includes Substack's 10% and Stripe's processing fees. After these fees, you would typically keep around 86.1% of each transaction.”
In Summary: SUBSTACK receives 10% of the subscription STRIPE receives 2.9% of the subscription as a credit card fee and $0.30 per transaction and for recurring subscriptions there’s an additional Billing fee of 0.5% WRITER receives around 86.1% of each transaction
For subscribers from South Africa a payment plan would be prohibitive. Substack suggests an amount of $5.00 per month or $50 a year. For South Africa, $5.00 would mean over R90 a month!
I trust that this throws some light on the whole plan and the process. Whether you choose to be a free or paid subscriber you are most welcome on my blog. Thank you for being part of my writing family. Let us keep the site growing!