After a couple months of blogging about publishing every day I'm beginning to realize that the archive feature isn't a very useful way to find things. E-book publishing is a topic I've come at from a few different angles, so it's time to collect those posts with a little commentary. E-books are probably the fastest growing segment of the publishing industry, but that's only because they started from such a low level. I like to use Amazon as a proxy for the whole e-book market, and even the best selling e-books on Amazon rarely make it into the top 10,000 titles. Yet, Amazon believes strongly in the future of e-books, has made a serious commitment to publishing original short-form e-books (Amazon Shorts), and even published e-book versions of thousands of classics a couple years ago.
If we fool around with the definition of "profit," than E-book publishing is also the most profitable segment of the publishing industry. The cost for writing and editing e-books is the same as for paper books, but the production cost is essentially zero - you get paid for loaning customers some electrons from the power company. You can produce e-books in any old software, there are multiple free solutions for creating PDF's, but if you're doing it as a business, you want to at least consider Digital Rights Management (DRM). While many mom-n-pop e-book publishers sell directly to their customers, sometimes e-mailing PDF attachments when payment is received, the big boys use e-book server software from Adobe, Microsoft or Mobipocket.
The marketing of e-books online displays some unique features, compared with traditional book marketing. Since customers never hold an e-book in their hands before purchasing it, aesthetic niceties like cover design are sometimes wasted on them. For me, the Yin and Yang of e-book cover design is best expressed by comparing two of the biggest sellers: business texts and erotic titles. Proper titling of non-fiction e-books is the most critical step of the publishing process, since keywords in the title are the main mechanism through which shoppers will first find the book on Amazon or any other online store.
All that said (assuming you read the linked articles), just because the e-book publishing business has a much lower entry barrier than the paper publishing business doesn't mean you should rush into it. For example, Lightning Source has been running a free e-book title setup promotion for the last couple years (for publishers in good standing) yet the only e-books I've published are simply downloadable versions of my paper books. In self publishing, the two primary jobs are writing and marketing, and neither of these are made any less labor intensive by publishing exclusively e-books. Currently, e-books generate around 15% of our net profits, but there is some cannibalization in that figure, i.e., if we didn't offer e-books, we would sell a few more print on demand copies.
With the exception of the production costs and the profit margins which are higher for e-books than even print on demand (you can net 75% of the e-book cover price on Amazon or 100% on direct sales), there's little difference between the e-book publishing business and the paper publishing business. You need to do your market research before you start writing to determine whether potential customers really exist or if it's all in your head. You have to figure out a marketing strategy to reach those customers, because with the exception of online catalog listings, they aren't going to find you on their own. Even with great titling, you won't get any initial attention unless your title doesn't have any competition, and if that's the case, there's a good chance there's no market.