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It is estimated that an ebook only costs 12-15% less to produce than a paper book.
Keep in mind that most titles do not break even; the "blockbuster" titles earn most of the income. Costs that do not change based on the medium include: author's advance, editing, legal, marketing, promotion / PR, and management overhead. Retailers still have credit card processing, database and hosting costs.
Ebooks will cut out printing costs, inventory costs and one middle-man (the distributors, like Ingram). However the retailer now has more server maintenance, higher bandwidth costs, more IT staffing, more backups etc.
By the way, most books I've seen are cheaper in ebook format, especially hardcovers but trade as well -- especially when you add in shipping.
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