To Katie Bremer's answer I'll add this: for ebooks, you need to distinguish between fulfilment channels and fulfilment+marketing channels. Fulfilment channels merely simplify things like shopping carts, taxes, complaints and other things that would be costly for you to maintain on your own. Smashwords, Scribd and Lulu are examples.

Amazon is the dominant fulfilment+marketing channel. The Kindle format is so dominant that even if you do have your own setup, a lot of readers will demand a Kindle edition. Users you can't reach with your own marketing will also find you through Amazon searches, and will be more likely to buy even if they DO see your site (since many people limit their online shopping to a few trusted locations). This type of channel is worth the commissions, since you'll more than make up for the lower margins via added volumes.

So don't think of it as free vs. commissions. They provide a valuable service and charge for it. You may save money upfront if you did it yourself, but you'd pay the costs in other ways (likely much higher since you don't have scale efficiencies).

If there IS some truly free channel out there, you have to ask, how are they sustaining themselves? If there's no good answer, you probably don't want to deal with them.

Selling ebooks is a business. There is no such thing as "free" in business. Someone, somewhere is paying for it in some form (for Katie's answer, even Paypal charges a commission after all, on credit card transactions).