What's traditional publishing?
$20 book ($10 wholesale)
$1 per book royalty (10% of wholesale)
If your advance was $5,000, you'd have to sell 5,000 books to earn out your advance. After 5,000 books are sold, you would then start to receive a royalty check twice a year.
The publishing company assumes 100% of the risk. They edit, pay for printing and marketing and everything else. If you want to sell some of the books yourself, you can buy them at wholesale, which is a great idea because you'll make a lot more money on them than the books sold through bookstores and other retail outlets.
What's self publishing?
- You can pay for everything a la carte (editing, cover design, interior book design, printing, marketing, etc). You buy the books to sell yourself.
- You can purchase a package deal that usually includes all of those things, as well as a small number of books. Additional books are available for you to purchase and sell. These companies are often called book packagers, and they may have a website where they will sell your books, although don't expect to sell many through them. You can also buy the books to sell yourself.
- You can do "print on demand," which means you can get your book published for free or for very little. With many of these companies there is no set-up fee because you're usually just uploading your files to their website. You still have book production costs, meaning you really should pay a professional book editor. (Sorry, but your neighbor who is a high school English teacher is not a book editor.) Unless you're a graphic designer, you should probably also pay pros to do those jobs, or risk having a rather unprofessional looking book. Print-on-demand copies of books are not printed until someone buys one, which is why you have very low or no up-front costs. You can buy books to keep in stock for selling at in-person events.
Which type of publishing should I use?
The hardest part of publishing is marketing, distribution, and sales. Publishers work with distributors who have connections with bookstores, libraries, and other retail stores. It is highly unlikely that your self-published book would ever end up in any library other than those in your area. My books are in thousands of libraries across the country because they were traditionally published.
On the flip side, publishers do very little marketing any longer. This is why authors have to have a platform before most publishing houses will sign a contract. A platform means that you have a blog, an active community on at least one social media platform, and a vibrant email list. It doesn't make sense to send authors on expensive book tours unless they already have a following of a few hundred thousand fans online. Most authors have a niche, and their audience is not watching morning television shows or going to bookstores regularly. It makes more financial sense for authors to attend conferences and other events where they will meet lots of people who are interested in what they write.
The main reason that most people self publish, however, is because traditional publishers can't afford to publish every author who approaches them. They reject more than 95% of the book proposals that are sent to them. If you want to be published with one of the Big Five, you have to have an agent -- and agents reject more than 95% of authors who query them.