The basic difference between these kinds of publishers is in the control and supervision of production process, including payment and earning methods. Vanity publishers help authors self-publish their books. The author pays the vanity publisher for editing, formatting, cover design, and often marketing and promotions of the book to make sure it is visible in the market. Using the vanity publisher is basically far more expensive than just self-publishing your own book but the professional input might be higher when handled by vanity publisher. The vanity publisher also typically requires an upfront payment and but does not take royalties from book sales. The contract ends with publication of the book.
In traditional or conventional publishing, the publisher does not charge the authors any money. The authors are actually paid for their books. They share royalties with the traditional publisher. The publisher handles editing, formatting, cover, publishing, distribution, and promotions. They share royalties with the author for all book sales. The publisher also bears the risks where the publication cost is not recouped from sales. In some instances, big authors are even offered an advance payment on future royalties, at least to keep them with the company. But first-time authors basically start earning royalties from the first book sale. The basic difference between the three publishing types is in the mode of payment, payment for the production, bearing of risks, control/supervision of production, and earning format.
If you do not exercise caution in selecting a vanity publisher you could get duped. People who are not familiar with the publishing industry may not know the difference between these kinds of publishers and they get scammed even without realizing it. This often happens in this era of e-publishing where there are several vanity publishers online who might be wrongly seen as traditional publishers by unsuspecting customers. Some vanity publishers could even advertise themselves as “hybrid publishers” even when they are only into vanity publishing. It is the responsibility of the author to do your research and identify if the company is really what it says it is.
In summary, the vanity publishers require upfront payments for their services. They do not usually distribute your physical books to bookstores and libraries. For e-books, the publishing is done under the author’s Amazon account (if Amazon is the platform the author wants to use). Remember they are helping authors to self-publish their book. They do not take royalties from the books they publish. If a vanity publisher offers to split royalties then there is a possibility of scam involved. This is because you are pre-paying for the book as a self-publisher. But when such publishers appear online some people may not understand the difference.
Trade publishing does not cost the author any money. The trade publishers bear all the risks hoping that the book will sell enough copies to make a profit for both them and the author. This kind of publishing is done under the publishers registered company name and not the authors’ personal company name of Amazon account (for e-books). The trade publishers distribute the books to many physical and electronic locations.
In self-publishing you do everything yourself, from finding designers, editors, and formatters, to paying them for their services, and uploading your own book online. This process cuts production cost but you also have to be careful with quality of production not just saving cost.
Self-publishing and vanity publishing have the same end result. Whether it is done by the author or a vanity press, the book will be self-published under the author’s personal company name (if they have one) or Amazon account (if this is the e-platform the author is suing). Royalties are sent directly to the author. For e-books, the author a can personally track book sales through his account on the e-platform used in self-publishing.