The first thing to consider when choosing which route to take is what your goals are. Do you only want to see your book on the shelf in a bookstore? Is having extra time to write more important? Is making money off of your writing the most important factor? Are you a control freak like me who will set fire to everything if someone messes with your word-baby? I'm going to compare Traditional and Self Publishing based on an author's motivations and needs.
ControlSelf-Publishing is a control freak's dream. The author controls everything from the editing, book cover art, marketing plans, formatting, and everything else. You could put a My Little Pony flip book animation in the bottom left hand corner of the pages within your book if you so desire. You might want to get permission first so you won't get sued.
With a traditional publisher most contracts will say that you have "input" on what edits are made or what the cover looks like which seems like a good idea. In practice that usually means the author gets to complain about the publisher's choices and the publisher pushes on without changing much if anything. Other things you have little to no say in include formatting, price, release date, print run, royalty payout schedule, and so on. Some of these things might be included in your contract or they might not. For anyone going the traditional route I cannot emphasize enough that you should read through your contract and hire a lawyer who is familiar with the process to look over it as well. Otherwise you could find yourself at the local B&N sitting on a snare drum in clown pants with no shirt and a large pink bow tie, all because it is in your contract.
TimeWith Self-Publishing you control everything, so you have to spend time on everything. Unless you are hiring out for everything you need, you will be doing some of the ground work yourself. Time becomes a very precious commodity. I'm sure more experienced author-publishers have found ways to streamline the process, but I have found that everything that needs to be done will drastically reduce the amount of free time you have. I can attest that hiring out for some of the work will help reduce the amount of time required, but it still feels like I need a time machine to get everything done.
The time spent querying agents and publishers could take multiple manuscripts with multiple rewrites before finally getting past the gatekeepers. An author has to pay the tithe to the corporate overlords before they will allow the author the privilege of being able to sell out on their work. WRA! Still think of the amount of time saved when a publisher takes over editing, cover design, and everything else. You may have to wait for it to be published for a year or two or it is quite possible that the publisher will sit on it and the novel may never see the light of day. On the bright side instead of running around looking for people who work on editing, cover art, formatting, kitten sweater knitting, and fez wearing, you can work on writing the next great adventure into the forest of mushrooms. I'm sure I'm missing something here as I have no direct experience here, so if you have dealt with traditional publishers before I would love to hear any other things that may take significant time with this route.
MoneyWhen self publishing all the risk and money is paid up front. I've posted about the cost of self publishing previously, but this isn't just about the cost. It is also about the royalties that you receive. For most self publishing avenues those royalties can be as much as 70%. The actual payouts depend on how popular your work is, how effective your marketing campaign is, and how much you price your work.
With a traditional publisher things get a bit more convoluted as to how the money portion of things is handled. Typically an author will earn 15% royalties on their work. Because traditional publishers price their books at potentially over 10 times more than most self published books the actual amount gained in royalties could be more. For instance, a $20 hardcover would earn a $3 royalty for every one sold compared to a $4.50 self published ebook would earn a $3.15 royalty. The payouts in terms of actual royalty amounts per book purchased could be very similar, but most likely, with all things being equal, the cheaper book is going to sell more copies than the expensive one. I haven't even begun to cover the other costs of traditional publishing.
Traditional publishers have to pay for the editing, formatting, cover art, and other miscellaneous baubles that are added to your work. Publishers take a portion of all royalties to pay for these services. They don't assume the risk themselves. They also get to decide the prices of those services. The biggest risk for them comes in the form of advances. It is very rare that they give out advances that make sense for the author. For a first time author with no track record it is rare that they will give an advance at all unless it is for a celebrity. If you have a successful product or have a massive following already then you can negotiate from a position of power. With these costs an author is unlikely to see a royalty unless the book "earns out". That happens when your portion of the royalty (not including their percentage of the royalty) pays for the publisher's cost in full (including the advance). Many times the only money the author will earn will come in the form of an advance. The structure of royalty payout might differ based on the contract.
I haven't mentioned the differences in promotion as of yet because there aren't many. It's like comparing a pink elephant with a slightly faded pink elephant. Most traditional publishers are going to expect the author to handle most of the promotion for their work. They will help with getting the book on the shelves of bookstores, submit it to some of their preferred reviewers, and maybe even schedule some personal appearances and signings. The extra visibility will hopefully result in more sales, but these tactics are becoming less effective. Traditional publishers have been very slow to adjust their tactics. That leaves the author to shoulder the brunt of the promotional responsibility.