How Profitable Is An Online Community? (Updated for 2024)
So you want to start an online community?
And the first question that came to your mind was, “well, are online communities actually profitable?”
With a market size of $1.2B - there’s plenty of business to go around.
Especially considering:
- You could start a online community with as low as $25
- Based on our data, online communities generate an average of $331K per year
- You could see gross margins as high as 99% with online communities
There’s money to be made. Don’t worry.
But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a online community.
Let’s dive in!
Is an online community profitable?
Yes, an online community is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.
For instance, since average revenue is $331K per year with an estimated gross margin of 65%, you could expect to recover your investment within 7 months or even less.
But of course, it all comes down to how much you earn compared to the potential revenues of your online community.
To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.
Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your online community is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.
Is an online community worth it?
If you’re wondering if a online community is worth it, the answer is a big YES. With online communities, you have the potential to earn $331K per year (this is based on data reported by real founders).
Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.
With a market size of $1.2B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.
Of course, you must learn and understand every aspect of running a online community to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.
You might want to consider reading more specifics about successful online communities case studies.
Examples Of Profitable Online Communities
Here are a few examples of profitable online communities, and a few more details about them:
1. SelectSoftware Reviews ($40.5K/year)
Phil Strazzulla, founder of SelectSoftware, came up with the idea for his business after building a personal brand in the HR space through a weekly whiteboard video series. He realized that HR professionals were struggling to choose the right software for their needs, and saw the opportunity to create an online review site, similar to NerdWallet or WireCutter, for HR software. With organic search traffic growing at 30% per month and revenues hitting $1k per month, SelectSoftware has gained traction in the market.
Is it profitable? Yes
What's the gross margin? 99%
How much money it makes: $40.5K/year
How much did it cost to start: $50
VC-turned-entrepreneur Phil Strazzulla, who previously built a successful b2b SaaS business, shares how he bootstrapped an online review site for HR software into a viable business with over $1k monthly revenues in just 3 months through organic search traffic growth and selling high intent leads.
2. Seedscout ($108K/year)
Mat Sherman, founder of Seedscout, pivoted from being a struggling musician to a startup enthusiast, eventually creating a network that simplifies introductions for founders, investors, and job seekers. Inspired by his own challenges in raising capital, Seedscout now generates $9,000 monthly from 65 paying users.
Is it profitable? Yes
How much money it makes: $108K/year
How much did it cost to start: $1K
Case study: Seedscout is a social network for founders, investors, and job seekers that generates $9,000 per month from 65 paying users and has attracted over 1,500 users who are open to intro requests, offering valuable networking opportunities in the startup community.
3. Net Net Hunter ($144K/year)
Evan Bleker, an investor and entrepreneur, started Net Net Hunter after struggling to find enough net-nets to fill his personal portfolio. He created a membership community focused on a niche value investment strategy, offering a list of roughly 1000 international net-nets and a community forum for sharing ideas. The business has become a stable cash cow and Evan is now working on another web startup.
Is it profitable? Yes
How much money it makes: $144K/year
How much did it cost to start: $1K
This case study is about a successful entrepreneur who created Net Net Hunter, a membership community focused on a niche investment strategy that now earns $12k per month by providing a list of roughly 1000 international net-nets and filter through them by hand to identify the top 40 or 50 to focus research efforts on, and has since moved on to creating a new start-up project.
Learn more about starting an online community:
Where to start?
-> How much does it cost to start an online community?
-> Pros and cons of an online community
Need inspiration?
-> Other online community success stories
-> Marketing ideas for an online community
-> Online community names
Other resources
How much can you make with an online community?
With a online community, you can make an average of $331K revenue per year (based on data reported by real businesses).
You can start with an initial investment as low as $25. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.
How much does a online community make a week?
Based on our data, average weekly revenue for a online community ranges around $6.89K. As such, you could see monthly revenues of $27.6K.
To know if your online community achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.
Learning your weekly profit can also show whether you're hitting your target goal for your online community.
How much do online communities owners make?
The income of an online community owner can vary depending on various factors such as location, size, competition, and the owner's business skills.
But to give you some idea, the weekly revenue of an established online community is about $6.89K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.
While the potential for earning a good income as an online community owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.
Online Community Profit Margins
Generally speaking, an online community can expect profit margin of around 65%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an online community, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.
However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, online community owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, online community owners can ensure long-term sustainability and profitability for their business.
Online community owner salary
The salary of an online community owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established online community, in a prime position, might see an average weekly salary around the ballpark of $4.48K.
But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.
Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.
Conclusion
In a nutshell, based on many of our examples, a online community may be a promising business to start - but the success of your online community mostly depends on your effort and your approach.
If you focus on these, you'll have a much higher chance of a profitable online community.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
