A Local Magazine Costs $7 a Copy to Print and Mail

TJ Larkin recorded this one right after getting home from a BNI group. Someone he had met through the newsletter invited him to take their seat, and before the meeting started he ended up talking with a woman who runs a local magazine that is essentially a franchise. She did not share everything, but the costs she did share surprised him. In about ten minutes he walks through what he heard and what it says about local media.

She didn't think anyone reads newsletters

The first takeaway had nothing to do with money. She was not curious about what TJ was building and did not ask him a single question. The one thing she said about newsletters was that she doesn't think people even read them.

TJ points out that we can track that, and that around 60% of people are reading, if not more. He thinks she was writing it off because it is not her business. He says he feels sad for her. He says she is the norm, and that is one of the big advantages of a newer model: most people in older, traditional businesses just put their heads down and do what they have always done.

The franchise fee comes out of every ad dollar

TJ says he knew from common sense that a magazine costs a lot to put out, but the numbers were far higher than he expected. It is a franchise. He did not find out what she paid, but from what he has seen, 10 to 20K looks like a normal upfront fee, so he is guessing that is the range.

The other big takeaway was the ongoing fee: 15% of the ad revenue she generates. She pays the fee and then gives up 15%, so she only keeps 85% of what she sells. TJ thinks the franchise does a good amount of the work, like creating the graphics and ads and maybe structuring the magazine, but he did not get into the details with her.

A magazine for 1,800 homes

This was not a city magazine. It was a neighborhood magazine, which TJ finds wild given that it can be profitable. In the one neighborhood she gave a number for, the magazine goes to 1,800 homes, and that is the top amount of potential clients for it.

There is a reason for the small size. TJ says the franchise only works in high value neighborhoods, with homes from $800,000 to $4 million. That is a good target, upper middle class to upper class, but it limits how many people you can reach.

$7 a magazine adds up fast

The number she did give him was her cost per magazine, just for the physical side, meaning printing it and mailing it: $7 each. TJ says he is not going to do the exact math on air, but it comes out to about 12 grand a month, however much money she is making, just to get the magazine out the door. For 1,800 homes, that is what stunned him.

She also casually mentioned other costs, like legal fees and a writer or someone who does that kind of work. TJ says she listed four or five different things beyond what he had already heard. Every time he looked shocked, she said that was not all of it.

Working back to what she must earn

TJ takes the 12 grand and adds "five grand more" on the low end for those other costs, which makes about $17,000 a month in costs for her. He figures she has to be making at least 20 grand a month in ad revenue, or she would have thrown in the towel by now. That is his estimate, not something she told him.

She did tell him she has been doing this for 10 years, so she probably has a lot of relationships. She also admitted the difficulty: many of the small businesses she talks to want to advertise but do not have the money. That matches TJ's own experience.

Why this makes TJ feel good about newsletters

A magazine has more ad spots, which is a pro for her. But TJ points out that a newsletter sent two, three or four times a week, or even daily, has way more ad slots than a monthly magazine.

His costs, he says, could be essentially zero if he wanted: get sponsors before you get ads, and use the sponsor money for the ad. Realistically there is a cost, but it is low compared to what she spends. TJ says his newsletters do similar things to her, just for a significantly wider audience with about 90% less cost.

Almost nobody is curious about new models

TJ ends where he began. He thinks the lack of curiosity he saw is probably true of almost everyone in that industry, whether they run a franchise or are thinking of buying one. Digital marketing, email and local newsletters are foreign ideas to 99% of people. His advice is to run with it, go all in and put in true effort.

He also says he would love to chat with anyone interested in doing a local newsletter, or already running one, and may record the conversation and put it on YouTube so everyone can learn along with him.