Who says e-books don't sell? If you believe Scott and Stephen Pendergrast, founders of Fictionwise.com, an e-book publisher and retailing site, they sure can—at the rate of about 10,000 titles a month.

Based in Chatham, N.J., Fictionwise.com was launched last June by the Pendergrast brothers and began by specializing in electronic editions of short fiction in the science fiction and fantasy genres. But, said Stephen, reader demand convinced them to add full-length works, as well as mystery, action, adventure, horror, romance titles and straight fiction. Fictionwise.com e-books sell for anywhere from 30 cents for a short story to $6 for a novel.

Stephen has a technical background, working at Bell Labs in software development. Scott is a businessman who launched Mindwise Media, a Web-consulting firm and virtual learning and training Web site. "We wanted to work in digital content," said Scott, "but we didn't want to deal with warehouses." The site was launched with their own money and that of friends and family. The company is "lean and mean," with five employees—"no excessive burn-rate," Scott said. Stephen selects the titles, with recommendations coming from readers and genre specialists who have taken a liking to the site. Consumers somehow found the beta version of the site, "with no publicity," and the first customer bought 17 e-books, "before we had the author's contract approved. We've been overwhelmed by demand," Stephen told PW.

The site lists nearly 500 titles, mostly reprinted stories and some original material. The site currently carries about 10 novels, with 30 more to come in the next month. Authors include Geoffrey Landis, Kage Baker, Harlan Ellison, Robert Silverberg, Damon Knight and Mike Resnick. The brothers are very bullish on e-books: "This isn't going to retreat," said Scott. "It's going to go up. More devices are coming. If we keep growing this way, we'll be profitable by the end of the year." Stephen added, "People who say they wouldn't read a book on a Palm Pilot haven't tried it."

Fictionwise e-books are offered in a variety of formats: for Palm Pilot, the new Franklin eBookman, the old Rocket reader (Fictionwise is negotiating with Gemstar for the new version), and for a few obscure, but free readers for Windows CE and other devices.

The site offers "marketable" advances to authors (against 30% royalties on gross receipts) and an affiliate retailers program. Some Fictionwise e-titles are also offered through Amazon.com, BN.com and Contentville.com. And Fictionwise.com sells its e-books without encryption. "Authors aren't concerned. Publishers are worried about a Napster situation, but that's a false analogy," Scott said. "Our audiences are not ripping off copies. And the authors hear from Fictionwise customers. We're tapping a new audience."