Desktop publishing and the Internet make it possible to publish your own book profitably.
Here's what makes self-publishing viable:
1. New ease and economy of designing and printing books
2. Worldwide Internet publicity and marketing
3. Efficient, highly cost-effective online sales mechanisms
4. Speedy, cost-effective worldwide shipping.
"Self-publishing" has traditionally been perceived as "vanity publishing:" no publishing house will accept your book for publication—presumably because it is unworthy of a significant readership—so you spend your own money and publish it yourself.
That was then, this is now.
The maturing of the publishing industry into a big-money business, the advent of desktop publishing and the Internet as a communication, publicity and sales medium have completely changed the economies of book publishing.
The Big-Money Business
The Desktop Publishing Revolution
The Internet as Bookseller
Desktop publishing has made book production easier, faster and cheaper, and the Internet has made the rest of the chores simple, quick and cheap. Publishing which used to require dozens or even hundreds of people can now be done by one person—you.
Search engines, Google Book Search, Amazon.com and other online booksellers have all made publicity, marketing and sales of books easier.
Most importantly, the global Internet has obliterated the traditional division of national and regional bookselling markets; and, being timeless, has obviated publishing's traditional spring-and-fall-lists, front list-midlist-backlist mentality, and all the rest of the traditional publicity and marketing apparatus.
It is now possible for anyone, anywhere in the world, to discover your book, buy it and have it delivered to them quickly at reasonable cost. Your potential readership is now worldwide, without the traditional mechanisms of sales reps, sales territories, book fairs, and licensed foreign publishers.
Every book now has—or at least should have—its own web page, and preferably its own dedicated website to take advantage of these developments. Too hard? Here, look at this.
It can cost as little as $2 or $3 per copy to produce a handsome 100,000+-word paperback book. It costs as little as $2.23 to ship a one-pound (454-gram) book via USPS Media Mail to any address in the USA in 2 to 9 days, and as little as $9.85 by First Class Mail® International to any address in the world in about the same time.
The world book market is now unified, and it's all yours. Your readership is not just in North America or the UK, but Europe, India, Pakistan, Australia, New Zealand, and indeed anywhere there are readers of English, which today includes almost every country in the world.
Yes, there is risk involved. You must spend some of your own money—thousands of dollars—to have your book formatted, printed and bound, but if your book is good and can appeal to a substantial readership, over time you should be able to earn several times what you spend to produce it.
Instead of a royalty of $1 to $3 per book, you'll probably earn $11 to $13 per book (after expenses).
—To earn you $10,000, a big publisher would have to sell 5000 copies (at $2 royalty per copy)
—To earn $10,000 on a self-published book, you'd have to sell only 1668 copies (834 copies to pay off all the expenses of producing the book, and 834 copies for your $10,000 profit)
A useful resource: Book Business Magazine's website.
Another: this excellent article on self-publishing.