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Many of us don't have such mass appeal. Possibly you're sort of writer who knows exactly where you stand in that respect. But many don't, and they're flooding POD market with stuff that most readers just plain don't want. Add to that badly edited stuff, and credibility problem with POD is understandable.
Ideally, what you want is for your e-publisher to simultaneously release your book in both formats without charging a POD setup fee. That way, you can direct all your promotional efforts to that single URL. However, these e-publishers have a real problem with backlog now, so if you want to travel road I did, you'll need much more patience than I did.
Taking advantage of a free POD option with your e-book will also help your promotional efforts. Many reviewers just plain won't touch an e-book. If you've done POD bit, in addition to being able to tell all your friends and family, "Look at this, I'm a real author because here's paperback," you'll be able to send review copies via POD to those book reviewers.
(I told my friends and family to kiss my butt, but I'm just a crochety old cuss.)
If you find yourself with an e-publisher who doesn't offer free POD, you may wish to shop around for a POD publisher. As you do this, remember business model. If a publisher makes all its money from writers, it doesn't need to sell a single book to a single reader to stay in business.
No matter how much praise they send your way, that's bottom line. Writing is a calling, but publishing is a business. Those authors who can't distinguish between two are what keep opportunists in business. (I was such an author for most of my life.)
Some POD places are no more than thinly veiled vanity (or subsidy) presses. They have a valuable role to serve, but let's be honest. Most do no editing, and they don't care. They may not be making a massive profit from your setup fees, but they're certainly making enough to stay in business. Even if you don't sell any books to anyone except your Gramma.
(A few new POD places help with marketing and charge no fees of any kind. I've been told http://www.bewrite.net is such a place, but have yet to visit it.)
Earlier, I recommended e-publishing before print publishing for free editing you'll receive. If you're going with POD, consider it mandatory. Either that, or pay an editor. The author who can write a mistake-free manuscript does not exist.
Still interested in POD publishing? I've done it, by way, and it worked out well. Here are questions you should ask yourself when you select a POD publisher:
A) Sale price of each book 1) Who decides what it is? 2) Will readers pay that much for your book?
B) Profit per sale vs. your setup cost 1) How many copies must you sell to break even? 2) Can you do it? 3) If not, do you care? How big of a financial hit are you willing to take just to see your name in print?
As a rule, US$100 or less setup cost is good and US$1000 is very bad. The latter, no matter how much publicity they promise you, is only a thinly disguised vanity publisher. You will not sell enough books to recoup that $1000 unless you are a real marketing machine. Even then you shouldn't pay $1000 up front. Pay $100 or less and then sell all those books. $1000 or more won't get you anything that $100 or less won't.
A comprehensive list of POD publishers, along with descriptions, can be found on-line at http://dehanna.com/database.htm
The site mentioned fails to mention Booksurge (http://www.booksurge.com), also known as Digitz (http://www.digitz.net), and Publish America (http://www.publishamerica.com). The first charges US$99 and second is free.
Another that isn't mentioned is Digital Print Australia at http://www.digitalprintaustralia.com. I've used them before. My setup cost was AUD$35 (roughly US$18), which compares rather favorably to those listed.
Their price per copy is also excellent. The quality is at least as good as what you'll find in bookstores. If you've ever bought a paperback from Writers Exchange E-Publishing, you've seen it already. If not, Digital Print will send you a free sample. They sent mine to China.
Two problems you may have with them, though, are shipping charges from Australia if that's not where your readers are located, and fact that they don't offer a way to sell books on their site.
For selling books, I used Book Store feature on Authors Den (http://www.authorsden.com) back when it was free. It offers a secure server. I know some authors who I trusted enough to send money to without a secure server. But I suspect that most of your prospective readers won't know you that well. In fact, they won't know you at all.
Another option is shopping cart feature at PayPal (https://www.paypal.com/refer/pal=BH2CTDYDK8RPW), which I haven't researched. But take a look. You oughta have PayPal anyway, because it lets people send you money or vice versa through email, absolutely free. They'll give you $5 just for signing up.
If POD place only prints "trade paperbacks," which are larger ones, your cost per book (and sale price per book) will be higher than if you can print "mass-market paperbacks." The choice is yours, but whatever you decide, visit local bookstores and price similar-sized books. If you write like Stephen King but charge twice as much per book, readers are going to buy author they've heard of, and that's probably not you. Yet...
Michael LaRocca's website at http://freereads.topcities.com was chosen by WRITER'S DIGEST as one of The 101 Best Websites For Writers in 2001 and 2002. He published two novels in 2002 and has two more scheduled for publication in 2004. He also works as an editor for an e-publisher. He teaches English at a university in Shaoxing, Zhejiang Province, China, and publishes the free weekly newsletter Mad About Books.