PA emails notifications of the book. They are mass mailed - boiler plate press releases that take approximately 2 minutes to change the title, genre and author's name, and send in bulk.
The set-up costs for POD are extremely small - which is the reason businesses choose PODs for small runs. The per unit cost is a liitle higher but they make up for that with higher retail prices.
Offset printing set-up costs can be very high because they have to set up the plates. There are no plates for POD. I've worked in print production I know of where I speak. If you are doing a large run - you can amortorize those costs across your entire run and it will come out to mere pennies per copy. If you are doing very small runs - than those thousands of dollars of set-up costs cannot be watered down to pennies per piece - and off-set becomes cost-prohibitive. Enter POD - with no set-up costs.
There are no materials costs for POD - other than the materials needed to print each copy of a book. The unit cost for paper, binding, manpower to get out out one average length Pod book is 5 or so bucks.
As for editor's wages - PA is obviously not using copy editors with english lit degrees who edit for content and style. They even admit, or should I say brag that they don't do so. They are merely cleaning up grammatical errors (or in some cases, creating grammatical errors). They are most probably running the manuscripts through a grammar and spell check program. And even if they do have someone read through the entire manucsript to fix grammatical errors - it only takes a couple of hours to read through each manuscript - so at 10 or so bucks an hour - those costs too are minimal. And these people are not making more than 10 or 12 bucks an hour. Trust me, the Harvard grads and experienced editors ain't flocking to Fredricksburg so they can get a job running MS Word spellcheck.
You are incorrect in your assumption, as I am not a PA author. I'm just someone with a brain and common sense who has a good enough grasp on the publishing industry to understand PA's business model.
If you are happy with them - more power to you. But do not kid yourself into believing they are spending more than a couple hundred out of pocket for each book they acquire. If they were they'd have been bankrupt years ago. They're only selling an average of 75 copies per title. Which means they are GROSSING around 1,500 per title - actually much less than that - considering they sell some at an author or bookstore discount. And those figures are gross - you need to deduct the actual cost to print each book (around 5 bucks), royalties, etc. The net figure therefore would be considerably lower - maybe 5 or 600 per title. That would leave them with a 5,400 - 9,400 LOSS on each and every title they've published to date - if your figures were correct. Let's see 5,400 x 10,000 titles... that's a 54 MILLION to 94 MILLION loss.
Anyone with even an elementary understanding of math and a good calculator can see that this is just not realistic or feasible. They are in fact spending a couple hundred per title, making a couple hundred per title and therefore grossing a few million for the company. This is the reality. This is also their business model. This is how they set-up their company from the get-go. It's actually not a bad business model - as there are obviously a lot of authors out there (10K and counting) that buy into their "first time writers gotta start somewhere" and "we pay royalties and ADVANCES"
First-time authors do have to start somewhere. Real, legitimate agents and real legitimate publishers are a good place to start.