We only hear about the success stories, and with making money so hard for most books from publishers, it has to be even harder if not impossible with self-published books.
Amanda Hocking did it -- though the Guardian thinks hers is just the kind of story that fuels the bubble and creates more suckers. They say the bubble bursting is the inevitable economic end of self-published e-books. This author (you will have to scroll down, he reviews other people's books on his blog, too) made it work -- after 13 years of rejections from publishers!
Most fiction by unknowns probably has little chance, but what about a lively (in writing and design) story about someone interesting to kids, told in an unusual way? What are the chances of that showing up in searches and getting read? Or a true disaster story or true anything people might search for, if the book were well-written, well-illustrated and well-designed -- not as a plain book, but as a truly interactive e-book that was more like a game in places than a typical book? I'd be willing to risk it for two of my mss. ("it" being the time and energy to find an illustrator and a designer, and the money to pay them).
I'm not sure I'd be so willing to deal with the stigma attached to self-publishing, though. Lots of readers share it. And would self-publishing non-fiction now make it harder to place fiction mss. with publishers later?
Of course, if the books sold millions of copies, there wouldn't be any stigma-- but I don't think I'm being unduly modest when I say that's not going to happen in my case. Children's biographies just don't sell in huge numbers (maybe that's why they're hard to place?). Thousands of copies year after year -- relatively small but steady sales to some people who really love the books -- are my goals. Novels are much more unpredictable -- in both directions, and those I wouldn't ever self-publish. Novels (at least, in many, though not all, genres) are popular with publishers and mine might just as well take its chances there.
