The half of a balance sheet that you can control
This article appeared in the Wall Street Journal yesterday noting that, yes, different self-published authors have wildly different levels of sales. (This will shock you, but apparently it helps to already have a fan base.)
I'll stop mocking Captain Obvious and will note that I agree that, if you are unknown, your sales are completely unpredictable (this is why agents and traditional publishers generally don't like new writers). You might not sell any books, you might sell a ton, you might sell almost nothing for months or years and then suddenly sell a bunch. Who knows? The world is a crazy place.
That makes life difficult if you hope to turn a profit: You can't control your revenues. This is true for basically all entrepreneurs--you might have a hit, or you might have a flop. Marketing can help, but there are no guarantees that you will be making X amount of dollars.
But there's something you can control: Your expenses. The less money you spend, the less revenue you have to bring in to turn a profit. If you spend an excessive amount, then you've backed yourself into a corner where you absolutely must generate huge revenues--which is bad, because you can't control revenues.
In the article, there is a woman featured who paid $3,000 to a so-called digital publisher. As far as I can tell, that money went to 1. format the e-book and 2. distribute it on Amazon, Smashwords, and Barnes & Noble. She seems to have done all her own marketing, so they're not doing that.
I'm going to take a deep breath here. I'm going to stay calm. And then I will simply point you to the post where I outlined my book expenses. What number appears under "Spent on creating e-books"? Oh, yes, a zero.
I am the first to admit that formatting e-books is kind of a pain. But seriously, it was two days of work. Do you get $3,000 for two days of work? Would you pay someone $3,000 for two days of work? It's not like they formatted her e-book, put it up, and gave her a pony--she paid $3,000 for what I'm going to guess was more like two hours of work, because these guys presumably weren't doing it for the first time.
I understand that some people are afraid of technology, but there is a lot of help out there, and much of it is free. At the very least please, please, please try to get an idea of what is involved in doing it yourself before you cough up some huge wad of cash. You cannot control revenues: You may never see that money back. You can control costs: If you don't spend it, you'll be that much closer to turning a profit.