I often get letters or phone calls from confused and sometimes worried authors, unsure whether or not to sign a contract with a publisher who's raved about their book idea but is asking for a 'contribution towards the cost of publishing the book'. The amount varies, but frequently it runs into the thousands.
Authors owe it to themselves to be very clear on one point - traditional publishers never ask the author for 'a contribution'. Traditional publishers only take on work they believe is worth investing their own money in, confident it'll make a return when the book hits the shelves. Indeed, this is precisely the reason (or one of) it's so difficult for new authors to get published. The publisher has to be sure that the book willsell.
Vanity publishers are cunning. They know many authors will be worn down by rejection. They know the elation authors will feel to finally receive a glowing report about their manuscript. However, once you've signed your name on the dotted line, the vanity publisher will take your manuscript, take your money and print several (usually poor quality) copies of your book. They won't consult you and they won't offer any help marketing or distributing the book. The vanity publisher isn't interested in selling copies of the book, it doesn't need to - they've already made their profit from the hefty 'contribution' fee they charged the author.
Consequently, vanity publishers have no relationships with bookshops, in fact some bookshops plain refuse to stock the books they produce. So, more often that not, the author ends up several thousand pounds down with a pile of books they cannot sell. Of course these companies don't advertise themselves as vanity publishers, most refer to themselves as 'self publishers'. But there is a vast difference between the way they operate and the way a reputable self-publisher operates.