So you heard about Substack. Maybe your favorite writer moved there. Or you're thinking about starting your own newsletter. But here's the real question: how does Substack actually work? Like, for real?
Let's cut through the hype. I've run a food politics newsletter on Substack since 2020 (that weird pandemic hobby that stuck). Got about 2,300 paid subscribers now. Not huge, but pays my rent. I'll show you exactly how this whole thing operates – the good, the bad, and what nobody tells you.
What Substack Actually Is (Hint: Not Just Newsletters)
Everyone calls Substack a newsletter platform. That's only half true. At its core, Substack is an email delivery system married to a membership platform. Think of it like Patreon meets Mailchimp, but simpler.
The magic is how it bundles three things:
- Writing tools (like a basic WordPress editor)
- Email infrastructure (no more worrying about deliverability)
- Payment processing (they handle subscriptions)
That bundle is why it exploded. Instead of juggling five different services, you do everything in one place. When I started, I was using Mailchimp + PayPal + WordPress. Migrating to Substack felt like trading a rusty bicycle for an electric scooter.
Reality check: Substack takes 10% of your subscription revenue. Plus payment processor fees (about 3%). So if you charge $5/month, you keep roughly $4.25. Still cheaper than hiring a developer to build a custom system.
Starting Your Substack: The Nitty-Gritty
Okay, let's get concrete. If you're wondering how does Substack work for creators, here's the step-by-step:
Setup Process (It's Faster Than You Think)
You sign up with email or Google. No credit card needed unless you enable paid subscriptions immediately. First thing you'll create is your publication name and URL (mine is foodpolitics.substack.com).
Honestly? The profile setup is almost too simple. You'll upload:
- A banner image (1200x300 pixels works best)
- Profile photo (make it recognizable)
- Short bio (this appears everywhere)
Total time investment: Maybe 15 minutes if you overthink your bio like I did.
The Publishing Dashboard
This is where you'll live. Left sidebar has:
- Posts (drafts, scheduled, published)
- Subscribers (with segmentation tools)
- Stats (open rates, growth charts)
- Paid (where you configure subscriptions)
The editor feels like Google Docs. Basic formatting, image uploads, embed codes. Nothing fancy. Sometimes I miss WordPress blocks, but the simplicity keeps me writing instead of designing.
Biggest limitation? No native video embedding. I host on YouTube and paste the link. Kinda janky in 2024.
How Substack Handles Money (The Important Bits)
Let's talk cash flow. This is where people get confused about how Substack works financially.
| Fee Type | Amount | Who Charges It | Real Example on $5 Sub |
|---|---|---|---|
| Substack Commission | 10% | Substack | $0.50 |
| Payment Processing | ~2.9% + 30¢ | Stripe/PayPal | $0.45 |
| Your Earnings | Remainder | You | $4.05 |
Payouts hit your bank account monthly. Minimum threshold is $100. Early on when I had 17 paid subscribers? Took three months to hit payout. Now it's consistent.
Personal gripe: Their fee structure isn't transparent until you dig. I wish they'd show net earnings upfront instead of gross revenue.
Setting Subscription Tiers
You decide:
- Free tier: Essential for growth (recommended)
- Paid tier: Usually $5-$10/month or $50-$100/year
- Founders tier: Higher-priced option ($250+/year)
I offer monthly ($6) and annual ($60 – 2 months free). About 65% choose annual. Smart people.
Crucial setting: Paywall percentage. This determines how much free readers see before hitting the upgrade prompt. I use 50%. Some colleagues use 20-30% for serialized fiction.
Growing Your Audience: The Unsexy Truths
Here's what nobody tells you about how Substack works for discovery: It won't magically bring readers. Their "network effects" are overhyped unless you're already famous.
My growth came from:
- Cross-promotions (trading shoutouts with similar Substacks)
- Social snippets (posting excerpts on Twitter/LinkedIn)
- SEO optimization (using keywords in headlines)
Substack does have a recommendation feature. Other writers can "recommend" you. I got 83 subscribers when a popular food critic endorsed me. But it's unpredictable.
The Algorithm You Can't Control
Substack emails don't land equally. Their system prioritizes:
- High open-rate newsletters
- Paid publications
- New subscriber activity
Translation: If your open rates dip below 30%, your emails might land in promotions tabs. Brutal but true.
Reader Experience: How Normal People Use It
Ever wonder how does Substack work for readers? It's simpler than the creator side.
When someone subscribes:
- They enter email (and payment if paid)
- Get welcome email with archive link
- New posts arrive directly in inbox
- Can read online if they prefer
The reading interface is clean. No pop-ups. Just the article and comments section. Huge upgrade over blog ad-hell.
Why Readers Prefer It
- No login required (emails contain full content)
- Commenting with context (discuss specific paragraphs)
- Audio versions (auto-generated, surprisingly decent)
My aunt reads every post on her Kindle using "Send to Kindle" feature. Game changer for older audiences.
Features That Actually Matter Daily
After four years, here's what I actually use:
| Feature | How Often I Use It | Why It Matters |
|---|---|---|
| Schedule Posts | Weekly | Batch writing on weekends |
| Subscriber Segmentation | Monthly | Send special announcements to paying members |
| Import Existing List | Once | Moved 800 contacts from Mailchimp |
| Recommendations | Quarterly | Cross-promote with similar newsletters |
The stats dashboard is basic but sufficient. Shows:
- Open rates (industry average: 30-50%)
- New subscriptions
- Paid conversion rates
- Top referral sources
Wish it had heatmaps though. Sometimes I'll publish at 9am and get 22% opens. Same post at 3pm? 47%. Trial and error.
Where Substack Falls Short (Being Honest)
Look, it's not perfect. When considering how Substack works long-term, know these limitations:
Design Constraints
Your branding options:
- Custom domain? ✅ (costs extra)
- Change fonts? ❌
- Custom color scheme? ❌
- Advanced layouts? ❌
My site looks nearly identical to every political and tech Substack. Sometimes readers confuse me with other food writers. Annoying.
Substack's App Problem
Their mobile app:
- Pros: Notifies readers instantly
- Cons: Buried posts in algorithmic feed
App users open 18% less than email readers in my stats. Make of that what you will.
The Alternatives Worth Considering
Substack isn't your only option. Here's how competitors compare on key factors:
| Platform | Fees | Design Flexibility | Best For |
|---|---|---|---|
| Substack | 10% + processing | Low | Writers who prioritize simplicity |
| Beehiiv | Free to $84/month | Medium | Growth-focused creators |
| Ghost | $9-$199/month | High | Tech-savvy publishers |
| ConvertKit | $9-$149/month | Medium | Established email marketers |
Tried Ghost for a month. Powerful but felt like maintaining a car. Substack? It's a bicycle with training wheels – gets you moving fast.
Critical Questions Creators Ask (Answered)
Do I own my email list?
Yes. You can export subscriber emails anytime as CSV. I do this quarterly for backup.
Can I leave Substack later?
Yes, but... You lose paid subscriptions unless you manually migrate payments. Huge pain. Plan to stay 2+ years if going paid.
Are there hidden costs?
Only if you want:
- Custom domain ($50/year)
- Paid legal entity setup (for LLCs)
- Chargebacks (rarely)
How hard is monetization?
Real talk: First 100 paid subs are brutal. Then momentum builds. My journey:
- Months 1-3: 12 paid subs
- Months 4-6: 47 paid subs
- Year 1: 288 paid subs
- Now (Year 4): ~2,300 paid subs
Growth compounds if you deliver value consistently.
Final Reality Check
So how does Substack work in practice? It's a friction-reduction machine. For writers: no tech headaches. For readers: no login walls.
But it demands serious commitment. Publishing weekly isn't optional if you want growth. I've missed exactly three deadlines in four years – each time subscribers noticed.
Still, watching strangers pay for your thoughts? Wild. Last Tuesday, a baker in Toronto emailed: "Your piece saved me $20k on equipment." That pays for more than servers.
Bottom line: Substack works if you work. It won't make you famous overnight. But build a real audience? Absolutely. Just bring your work ethic.
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