When an author publishes a book in the traditional way, the publishing house assumes the risk - the costs of publishing - in the hopes that the book sales will recoup that investment and begin generating a profit. The publishing house is, in effect, taking a bet on the book that it will do well and warrant that investment.
When an author self-publishes, she is assuming that investment herself. And there are some costs that a new-to-publishing author may not know to take into account as she begins investing in services to bring her book to market.
- Editorial - this includes developmental editing (helping to flesh out the story, guiding the direction of the book, putting together collaborators), line editing (making sure what's written makes sense to an objective reader, checking for consistency), and copy-editing (correcting grammatical and usage mistakes). It may also include fact-checking and legal vetting, if necessary.
- Design - Every book needs to be designed in a professional manner. Good design levels the playing field and assures potential readers that a great deal of care went into the making of the book. This is true of ebooks as well as print books. Every ebook format and print format has its own design issues; solving them thoughtfully provides a good experience for your readers.
- PPB/conversion - PPB stands for Paper, Print and Binding. This is the manufacture of your print book. At this stage, you choose the quality of the paper stock, what the cover will be made of, and how the book's pages will be bound. If you are publishing an ebook, you choose the formats you'll distribute.
- Marketing/Publicity - Marketing and publicity are the riskiest expenses because their results are not easy to measure. Did your book receive a bump in Amazon rankings because of a Twitter campaign, or because your sister told her county librarian, who added it to a book club recommendation list? It is quite difficult to determine whether you are overspending or underspending on marketing - so proceed cautiously, spend incrementally, and try to benchmark any possible results.
- Distribution - Each vendor has different rules for selling books - some require you to deposit physical copies in their warehouse on consignment; some require a specialized ebook format. The cost to the self-published author is one of time, doing the research involved in figuring out which vendors she wants to sell to, and what their requirements are.
Taking on all the risks yourself means that you receive the entire reward. Any time you offload a risk, you usually pay your partner a percentage of the sale of the book, or a flat fee. These costs can add up, making self-publishing more expensive than many authors realize at the outset.