OK, fine, sometimes it is unethical--if your customers want snuff porn, or child prostitutes, or crystal meth, I do encourage you to seek another line of work.
But lately I've read several incidences of people wringing their hands over selling short stories.
Now, I don't write short fiction--don't ask me why, everything just seems to come in at book-length for me. But I like short fiction, and from a business perspective, I sure wish I wrote it. If you write it, please consider yourself lucky, and take advantage of that fact.
The hand-wringing around selling short fiction seems to focus around two issues.
ISSUE #1: 99 cents is too much to charge for a short story!
Um, hey, not to sound all laissez faire, but why not let the readers decide that one?
I realize that there's this whole campaign against expensive e-books, but those people are upset about books that cost north of $10 or $15, not a penny less than $1.
I know, I know, if you look at it at a per-word basis, 99 cents for a 4,000-word short story is like charging almost $25 for a 100,000-word novel, but guys, it's 99 cents!
Why would someone happily pay 99 cents for a short story? Convenience.
Think about buying a can of Coke from a vending machine. That 12-ounce can probably is going to cost you more than an entire 2-liter bottle of Coke you buy from a grocery store. A small bag of chips? Again, at the price you pay a vending machine, you could get a HUGE family-size bag somewhere else.
Why do you pay so much to the vending machine? Because it is there when you need it.
The same thing is true of an electronic short story. Think of the last time you realized that "painfully boring" could be a literal expression--you were stuck in line at the post office around Christmas time, your dentist made you wait 90 minutes in a room with only a few old copies of Gum Disease Today to entertain you, your flight was delayed...and delayed...and delayed....
You would have gladly paid 99 cents for some relief, right? I mean, hell, you paid way more than that if you hit the lounge at the airport.
You could be offering that relief to your readers.Trust me, they would thank you for it. But instead, you're too afraid. As a result, you are driving your readers to drink. At the airport lounge. How can you look at yourself in the mirror knowing that?
OK, I'm being a little facetious. (But just a little. Honestly, given the way some people bitch and moan about waiting in line at the post office, I would pay 99 cents just to shut them up.) Of course you need to indicate in the book description (and possibly the subtitle) that you are selling a short story--give the word count, be very up-front about what the reader is getting.
But realize that you're not warning the reader--a lot of people don't want a huge novel, they are just looking for something quick to read on their phone. There is a real, honest-to-God market for short stories. There is nothing wrong with providing to that market.
ISSUE #2: I can't sell a collection of short stories and then sell the same stories individually!
Why the hell not? Konrath does it. Lots of people do it! And of course, the more titles you have available, the more likely it is readers will discover your work.
I assume this stems from the deep-seated fear many creative people share: They don't want to turn into George Lucas. They don't want to repackage and repackage the same content over and over again, because they know that they have a really crazed fan base that will feel obligated to purchase each and every new package, no matter how crappy it is, and they don't give a damn about anything except extracting as much money from those people as possible.
But you're not George Lucas! Not everyone's a fan--some people don't even know who the hell you are!
In fact, you have two separate markets here, and there's nothing wrong with serving them both. On the one hand, you have the fans and the bargain lovers. They will buy your collection, which you have considerately priced at a discount to buying your stories individually. Think of them as the people who do plan ahead and do go to the grocery store and do buy that 2-liter bottle of Coke and the HUGE family-sized bag of potato chips and do save money.
On the other hand, you have the people I described above, who are desperate for a quick read. They could probably use a vending machine too, if you have one.
One group is not better than the other. One group is not more deserving of your care, attention, and words than the other. It is perfectly ethical to serve both markets. You are making more people happy. That is a good thing.
Yes, let them know what they are buying. Yes, tell them in the description of the collection what stories are there, and tell them in the description of the story that it's available in a collection--knock yourself out! But don't be afraid to offer your wares as many ways as you can. People pay for convenience all the time, because it's worth it.
And you know, if it totally blows up in your face and everyone thinks you're a money-grubbing whore, 1. I'm sorry I steered you wrong, and 2. you can always take the story down.