There are several business models for Free Software (which I feel is a more interesting terminology thant Open Source), and you should also look into the FSF site and its what is free software page.
Notice also that even proprietary software is often non-profitable thru licensing. It is rumored that the development costs of SAP software is not paid by the pricy tag of the software licenses they are selling (and the same is probably true for Windows). The profit is even for them made around services.
However, free software has also a major benefit : the community working on it. Hence, it does usually happen that free software has good quality (often better than for proprietary software).
There are several books on Economics of Free Software (or Open Source). I found interesting The Success of Open Source by Steven Weber. An important notion is Externality
BTW, you generally don't sell profitably software (even proprietary ones). You sell something else, and you have to identify what that else is (it really depends on your case).
On the corporate side, many companies are spending many billions of dollars (or euros) on free software, many of them are paying developers to work on it (a vast majority of developers on FireFox, Linux Kernel, GCC are paid full time to work on free software development). And several companies are specialized on free software development and are making profit (usually thru "service", "support", etc...)
At last, I don't believe that it is easy to sell software with profit (a lot of proprietary software projects are failing!), and probably not easier than selling support or service on free software.