[3] Authors and independent publishers upload their manuscripts as electronic files to the service, which converts them into multiple e-book formats for various devices.

[4] Due to initially low profits, the firm switched to a distribution model that offered retailers a "30% commission in exchange for digital shelf space".

[4] Smashwords achieved a profit in 2010 and has distributed some of its books via Apple, Barnes & Noble, Kobo, Sony,[4] and KDP, Amazon.com's e-book publishing website.

[6] Coker, a former Silicon Valley publicist, started Smashwords in 2008 with the claimed goal of using technology to democratize publishing—allowing writers to appeal directly to readers without having to deal with gatekeepers such as agents and editors.

The only e-books the firm rejects are ones that contain plagiarism, illegal content or incitement to racism, homophobia or violence.