Self-publishing is where an author puts together the material himself and pays a company to print the book for him. Do you remember the episode, "Author, Author" from LHOP? Remember, they had to raise money to pay to print grandpa's book? That's the same thing. With a traditional publisher like Random House, the author doesn't pay to have his book printed. He might even get a small advance from a publisher, which means they give him some money against the royalties they expect to make off his book.
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