[rlauzon]

Originally Posted by BuddyBoy

A $7.95 paperback wholesales to the retailer for $3.50 - $4.00, and may even have been supplied to a distributor first for $2.80 - 3.40.

Of that, say $3.50, the publisher pays $1 for printing and shipping, $0.75 for royalties, leaving a marginal gross profit of $1.75 per titles. Out of that needs to come the costs for development, formatting, publicity, administration, an allowance for returns and remainders, and profit.

OK. I see how you are coming up with your numbers now.

Originally Posted by BuddyBoy

Now, an ebook publisher, producing only ebook titles, can save on the printing and shipping. Unfortunately you cannot eliminate the retail channel

Here's where you are (partially) wrong. You are right in that you cannot eliminate the retail channel. But the costs of retail are greatly reduced for eBooks.

Retail costs for a physical product are for shelf space, stocking fees, taxes for stock on hand, etc. Most of those costs disappear for eBooks, and the rest of those costs are greatly reduced. So instead of taking a $3.50 cut, a retailer takes $1 for an eBook.

Originally Posted by BuddyBoy

since most readers want a selection of books from multiple publishers, and won't be interested in visiting each publishers' website to find their titles. And, if you are using ANY retail channel, then as a publisher you cannot undercut your retailers and sell for less on your website, not unless you want to alienate your dealers.

You're in pBook mode still.

Since copying of an eBook is effectively free, an author can offer it through many retail channels at once. There is no shortage of copies like there is in the pBook world.

Originally Posted by BuddyBoy

The amortized costs for publicity, development, editing, formatting and administration have to be spread across the entire "print" run - and at the moment, ebooks are a niche market and as such have fairly high shared costs compared to print books because there are fewer electronic copies being sold.

Yes, that's today. We are talking about tomorrow when eBooks are the norm.

Also related to this is the selling of eBooks today at greater than hardcover prices.