There's the error - the trad pubbed author doesn't pay out those costs. However, if a SP'ed author is serious about publishing, they will need to pay costs for an editor, cover, and potentially marketing, too. All those costs will mean the SP starts at a deficient - if they are serious about selling.
If we're not going to even temporarily ignore the variable costs involved with SP, then we shouldn't ignore the gatekeepers or the career-ruining potential of insufficient sales. To say nothing of the cost of selling off your rights till the work reaches public domain. Speaking as a former acquisitions editor, something like 99% of what crossed my desk was unpublishable and unreadable dreck. Only 1% of submissions were worth the paper they were printed on and could be read as something cogent in something resembling a shared language. Maybe 1% of that were actually publishable. Some readable books are published, some unreadable books are too. But a lot of good, readable fiction is simply passed up by the big publishers. Good stories that can make money... just not enough money to satisfy a spreadsheet hound looking to justify the thousands of up-front costs involved in trad publishing. But the neat thing is, people can make a living on what the big publishers turn up their noses at.
So it's really a question of the variable up-front costs of editing and cover design for self-publishing versus a writer's honest chances of even being read by an agent or picked up by a publisher, then the chances of that writer selling enough to keep their work in print, and earn enough to warrant a contract for a second book. And remember, most books don't earn out their advance, so even after the 1% of the 1% you still have to fight the odds and be one of the lucky ones who's work manages to sell enough to keep you employed as a writer. If you don't sell enough, you're either starting again with a pen name... only in a worse position as you've got a back track record rather than a neutral one, or you're simply done with trad publishing.
There are a few assumptions here - as above, there are assumed no costs involved in SP.
Not at all. Just not addressing them up-front as those costs are entirely variable. You can get editing, layout, cover design, and marketing for nothing at all, or on up to absurdly ridiculous prices if you higher the absolute pinnacle of editors, designers, and marketing gurus. So rather than use a long string of 'it depends', I simply set them aside. Just as I set aside all the costs and variables of traditional publishing to make things easier to deal with. Like agents, non-standard contracts, taxes, direct sales vs book club sales, mail order (which still exists), failure to report royalties to authors, 'funny maths' that magically always seem to favor the publishers, or discounted Amazon sales. Granted, those costs are mostly borne by the publisher rather than the author, but a goodly chunk of those factors also directly affect the author.
The other assumption here is that TP and SP books will be priced equally, which I don't think is normally the case. I'm not sure how US pricing averages, but from what I've said I would expect ebooks on Amazon.com to average no less than $5.99.
Using Bookbub they would likely be roughly the same price.
A trick of Bookbub is that they only deal with discounted books, at least 50% off regular cover price. So that $5.99 ebook would be $2.99 for a Bookbub promo. So the trad published ebook would simply be reduced in price, but what most SP authors do is kick the price up to $5.99-$6.99 before they try to get a Bookbub ad then slash the price back down to $2.99. Or they just go with the free book with the ad to boost their ranking, then once the blast is done they put it back up to their regular price and hope that the sales carry over... which they generally don't. But some authors get readers that way, and those readers will spill over and pick up other books by that author at regular prices... it's kind of a mess really.
Additionally, aren't SP books commonly priced at lower price points, ie, $0.99 or $1.99?
No. The $1.99 price point is a black hole of sales. Basically no one prices their stuff there. Otherwise the prices really vary. Some are priced as high as 'regular' books so whatever price Amazon will let them price it at, including hundred of dollars per book. But the average price is around $2.99 for most 'new' SP authors and over time, if they're building an audience, they slowly increase their prices to be around the trad books. So it's more likely now that the 'average' SP ebook costs closer to $3.99. Even the SP crowd has the bestsellers, the mid-listers, and the also rans.
And for the reasons I mention, those numbers are wrong. But it does look neat when the deck is stacked that far.
As above, SP costs have not yet been subtracted. As above as well, the natural expectation would be that the average TP book will generate sales in excess of the average SP book.
Again, those costs are largely unknown. But also generally a one-time-only up-front cost that's involved with SP. Unless you want to pay to edit the book every time you run an ad, or get a new cover every time. So, yeah, the up-front costs need to be accounted for, of course, but they're not taken out of every promo you do. Once they're covered, everything after that is profit. A good chunk of SP authors swap edits for free, something I think people on these very boards do. Others pay for freelance editors to do specific things, like a simple copyedit or proofreading rather than hardcore developmental edits or the like. Further, if you have access to the internet you can find dozens of sites that have royalty free stock images that can be used for commercial purposes. Twenty minutes of surfing and an hour of fiddling with an image in your Photoshop knock-off of choice and you can have a cover for nothing but your time. There's also sites where cover designers have pre-made dozens of stock covers you can simply buy. For $20-80 or more you can have a professionally done cover inside of ten minutes.
So yeah, rather than all that and explaining the nothing to infinity that is the setup cost of SP'ing a book, I just set it aside. My bad.
I'm not trying to argue the point on any principle - I have to seriously consider SP as a possibility in future. I'm trying to balance a business argument, because I don't think either the assumptions, nor figures, have added up.
Honestly, it reads like you assume self-publishing is a get rich quick scheme and people are trying to lie to you, trick you, or otherwise fool you into trying something. It doesn't read like you're 'balancing' anything, rather that you already assume it's bullsh** and you're simply arguing against it.
To be clear, self-publishing isn't that much easier than traditional publishing. It involves far more work, honestly. But it's work you can reasonably do that doesn't entirely depend on others' approval. Whereas with trad publishing you can't even get started without someone else granting you permission to enter the industry. But again, we're not talking about an author with a multi-million dollar trad offer in hand wrestling with which way to take their career. We're talking about a large group of writers who cannot get into trad publishing contracts, or have been pushed out because they're not profitable enough for the multi-national corporations that own the big publishers.
There's a massive gap between making nothing and what's profitable enough for the big publishers. If you think holding out for a project that the big pubs finally accept, more power to you. Personally, I'd rather go it alone now and make what I can as I keep working on my craft... rather than you know, getting absolutely nothing in return for my work... possibly ever.
but he still glosses over a lot of the costs of sp and makes it seem easy to reach an amount that doesn't reflect reality - the published author will not have had to pay for editing, cover design. As a basic cost I would put that at about £500 - £300 for editing, £200 for cover - and that's very conservative. Which means you're really having to hit 200 copies - based on his cover price - realistically, as a debut, you might have to drop that price to shift volume - to see a profit of any kind. And most sp books don't sell 200 copies. So, yes, I think he was painting it as a more simplistic picture than it was. 
