I try to work on a tiered system. With a retail price of $14.99, I offer wholesale price of $9.99, and my per-unit cost (with shipping amortized, is ~$4.99. Here's the Amazon price breakdown on a 300-page B&W interior book:
As you can see, the profit is greater than the royalty on a $6.99 kindle book.
As for in-person selling, the premise is that for each unit I sell, I can replace that unit with two more. Eventually, it doesn't make sense to replace the sold unit, and I just put that sale into my author account.
Although I personally don't discount books, this pricing strategy allows for discounting on multiple book purchases. If you knock off $5 with a 3-book sale, you still make a tidy profit. ($40 - $15 = $25: still a better profit than selling 3x $9.99 kindle books.)
