A few years ago after I had written my first novel, I went through the normal steps for publication - contacting agents/publishers and attending writing conferences. Although many brilliant authors are rejected again and again and finally picked up (Kathryn Stockett received over 45 rejections before The Help was published ) after a year of rejections I decided to jump into the self publishing world. Here are some things to look for when making your decision.
Traditional Publishing: Nationwide distribution, the name of a well known publisher behind the new author offers credibility, and no upfront cost (you may receive a small advance on your future sales).
While this is intriguing, agents in this slow market are looking to sign on already established authors and many publishers/editors do not encourage authors who have not retained an agent. Also, if the book does not have the anticipated sales, it can be pulled from print, leaving you with no recourse unless you wish to purchase the rights back from the publisher.
Vanity Publishing: The Vanity publishing houses will publish any book for a fee. In addition to the up front fee, they will also require a stake of up to 75%. Distribution is limited and the quality of their books is not usually up to the standard of the big publishing houses. Their main business is to obtain the up-front fee with little incentive to put out a good product or sell many books.
Print-on-Demand (POD): Print on demand is a fairly new idea and although many POD publishers offer additional services, such as creativity and editing, you are still in control.
Read more about self publishing:
Measuring a Publisher's Health
Print on Demand Articles
New York Times Article
Self Publishing Part 1
Self Publishing Part 2
Self Publishing Part 3
Self Publishing Part 4