There are three plans available for extended online distribution.
In Standard plan, little to no inventory is maintained and orders are fulfilled by printing on demand. In case of Premium - 200 and Premium - 600 plans the books are printed in the lots of 200 and 600 copies respectively. This brings down the production cost and authors can either set a lower price for their books or earn a higher royalty at the same price.
More details are available on extended online distribution page.