Unless you're opposed to it on principle, Amazon will be your main market. On rare occasions authors will find a particular title does better somewhere else, but if you only want to mess with one market, go with Amazon. Weirdly, Amazon is far and away the best selling ebook retailer, but the most popular format is epub, which is not the format Amazon sells. I'm guessing pirating has something to do with that.
I don't have specific numbers, but based on what I hear from authors, Barnes & Noble is still clinging on at a distant second, with iTunes third. iTunes seems not to have caught on as much as people had thought for books. Fourth would probably be Kobo, which I understand is bigger in Europe.
Consider using an aggregator. This is a service that takes your book submission and then submits those to the various markets, taking a small cut for their service. Some markets don't accept submissions directly from indie authors, and some are too difficult to even try to deal with (iTunes in particular). The good thing with aggregators is that you can mix & match. You can have an account directly with Amazon and B&N, then use an aggregator to submit to Overdrive, Oyster, etc.
Aggregators include Smashwords, Draft2Digital, and Lulu.
I haven't used Lulu, but just looking at their site, they seem more focused on fleecing writers ($99 to convert to epub - every other market I've seen converts for free), though they may be better for print on demand than ebooks. Draft2Digital I haven't worked with, but I've heard good things.
I have a love/hate relationship with Smashwords. I like their general vibe and I like them as a customer. In addition to distributing, they have their own store, and you can choose what format to download from. I don't sell much, but I find I shift more freebies through Smashwords directly than with B&N or iTunes. You can set your books for free without jumping through any hoops. Text is submitted as a .doc file and sent through what they call the "meatgrinder", which converts it to several formats. The meatgrinder is reportedly notoriously picky, but I've never had a problem with it, just use as little formatting as possible.
I've had a few minor issues. Sometimes a book won't go through to a particular retailer, and I get a kinda "you don't sell enough for us to care" vibe from support, which is fair enough. I found that just resubmitting the same file or cover will start the process again and sometimes jump start things.
They do not adequately support multiple pen names or multiple authors. You have one pen name per account, period. If you want another pen name, open another account under a different email address (something that would get you in trouble at Amazon, so don't do that there). I had two author names on a cover (both of them me - there was a good reason for it), and they sent a message saying I needed to contact support to let them know who the primary author was, etc. I did, and got a canned response saying to basically do the same thing again, but to also create ghost accounts for the other author. At that point I took my ball and went home, taking the opportunity to go exclusive on Amazon (more on that later).
To their credit, the titles disappeared from all the retailers within 24 hours, which is pretty good turnaround. Hopefully they'll add support for multiple pen names, because I do like dealing with them, and continue to do so with some single author titles.
One of the issues that authors will face with aggregators is "censorship". I put air quotes around it because I know that it's not really censorship, the government isn't involved, nobody's going to jail, and if a company doesn't want to sell something they don't have to. Again, just remember that nobody reads this stuff. I've got all kinds of nastiness in my books and it's available everywhere. If one puts something in the category of "Erotica", tag it as adults only, and have keywords like "incest", "bestiality", etc, yeah, it might not make it to all the retailers.
Smashwords has guidelines (no rape, no underage stuff, incest, bestiality) but sells and supports it anyway. An aggregator may take the route of only distributing certain stuff to certain markets, while they might also take the route of not accepting erotica at all and avoiding the hassle. Additionally, most of the smaller companies use paypal, and they are notoriously conservative about naughty stuff, so I could see a crackdown in the future.
Amazon pays after 2-3 months (at the end of the month, two months after the sale), no minimum with direct deposit (or if there is, it's under $1). For a beginning author who also sucks at selling books, it's nice to get that little $1.70 deposit and not have to wait a year to hit some minimum balance.
Smashwords pays after 3-6 months (at the end of the quarter after they get paid, which may be at the end of the previous quarter). Minimum $10, payable over paypal. I have yet to be paid by Smashwords, though that's entirely my fault for sucking.
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