Starting an Online Magazine: Most Overlooked Costs

Gamut Online Fiction Magazine

If you’re a regular listener to the This Is Horror Podcast you’ll know that Richard Thomas is currently twenty-four days into his Kickstarter for new dark fiction magazine, Gamut. But launching an online magazine isn’t as simple as it may sound. In fact there are a multitude of mistakes and overlooked costs. With that said it’s over to Richard to provide some intel to others considering starting an online magazine. 

“When in doubt, budget more… prepare for the worst, always allocating more instead of less.”

So as we hit day 24 of the Gamut Kickstarter, with almost $37,000 raised, I am constantly looking at the decisions I’ve made along the way. What are some of the most overlooked costs of starting up an online magazine? Here are some things I’ve discovered.

Kickstarter Fees

Luckily I figured this out before we launched, but I didn’t realize until a few months before we started that Kickstarter will take out 8–10% of the money you raise. So when people say, “Why did you set it so high, at $52,000?” in reality, I set it lower than that, at about $47,000, preparing for the 10% Kickstarter fees ($5,200) right off the bat.


I almost forgot to include Submittable, which is the way people will send their short stories in to us. Why am I using them? Well, the last time I checked, they were still only $10/month, so I didn’t think it was that much. Ha. I didn’t know their rates went UP to $408 a year—$34 a month.  It’s tripled. It’s still a pretty low cost, but definitely more than I thought. I need Submittable so my staff can all access the stories, make comments, approve or reject, pass the work on to me for final approval, and have a way to cap submissions at 300 a month (for fiction, poetry, and non-fiction). I’ve found that it’s worth every penny to have a system like this to help us stay organized.


But you’re an online magazine, what shipping costs do you have? Well, we’re also giving away a lot of prizes, selling rewards that include books, and other physical items—coasters, blankets, you name it. So, it’s always important to make sure you include that cost, especially if you’re giving or selling a lot of items. If you miscalculate, $5 or $10 doesn’t sound like much, but if you multiply that by dozens, or hundreds, watch out—it adds up fast. It’s also why we don’t usually ship outside the USA—just too expensive. I did some research and a five-pound box to Canada, or the UK, is about $60. Less, if you can keep the weight down and in a smaller box, but still—way more.

Manufacturing Costs

One of the reasons we aren’t including a lot of ‘swag’ in our Kickstarter, is that the costs of making mugs, t-shirts, mouse pads, and art prints through an online company or service, typically doesn’t leave much meat on the bone for us. It’s just not worth it to only net a few dollars. We also have to be careful about any costs for making items on our own—whether it’s the cost of wood, or fabric, or anything else that goes into the rewards we create. With the Kickstarter, if you raise $300 on an item, but it costs you $125 to make it, and you make your goal of $52,000 you have to understand that you will have to reduce that number by your costs later, so it’s easy to bring in less—especially if you have a large quantity of items—which will reduce your bottom line.

Fixed Vs. One-time Vs. Ongoing

It’s also important to really crunch those numbers over and over again. There are some one-time costs, such as our website, that we probably won’t have again. So it’s good to know what that number will be up front, but also, what you won’t have to pay out in year two. Secondly, you have to look at fixed costs—if we’re paying ten cents a word, we know that number won’t change. So, if we publish 12,000 words a month, that’s $1,200 in fiction alone. Multiply that by 12 months and you’ve got $14,400 a year. But wait, it’s not really 48 months is it? It’s 52 weeks. So if you know you’re spending $300 a week how much is it really? $15,600. Ha. See, right there, just another way to screw up. Sometimes you have to estimate. How much money will we spend on advertising? It’s better to set a budget, at say $100 a month, and estimate it at $1,200 a year than to leave it out.


This is a painful one, and I won’t get into all of the ways you can offset income with costs, and deductions, but be prepared to pay taxes of 25-33% (federal and state). Also, I have to be prepared personally to pay taxes, not just as the business, but any income I may earn as the editor of Gamut.


When in doubt, budget more. Pad the numbers. Prepare for the worst, always allocating more instead of less. So when Kickstarter says they will take out 8–10%, I always estimate the higher cost. Better to budget more and have it, than less, and not.


The bottom line is that you should go over every possible cost, and always prepare for the worst. Take months to crunch the numbers, talk to other people that have done similar things, ask them where they screwed up, and where they had insight, and learn from them. If you don’t feel you’re ready then don’t launch your Kickstarter, don’t start your magazine or business. Best of luck!


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