Hi,
mpeagler, and welcome to AW.
mpeagler:
What are some of the disadvantages from this type of publishing house?
The big disadvantage is that you're putting money down without any guarantee that you'll make it back. Yog's Law is that money should flow to authors not away from them. The second disadvantage is that if a publisher already has money up front, then what motivation does it have to sell your book?
There are a number of things that you need to be aware of in order to make an informed decision as to whether it might be right for you:
1. Can you afford to spend US$X and not get that money back? This has to be the top of your list because if money's tight, then why throw it away?
2. What are your expectations for the book? Do you want it to be available in bookstores across the country? This is by far the best way of securing sales because people still buy books by browsing for them. Some publishers however use the weasel words of saying that books are available from bookstores, i.e. if you know the title and author then you can go into a bookstore and they can order it for you. That's not the same as it being made available in stores and it then becomes important to know what publicity and marketing the publisher is doing to get your book out there.
3. Is the publisher a POD operation or are they doing print runs? If it's POD then you need to find out if they plan to do any print runs because that can reduce the price of the book. POD is a perfectly legitimate technology, but books printed individually tend to have a high cover price (which can put off potential readers) and a POD operation is unlikely to be able/willing to put your books in stores because that would require a print run.
4. What marketing and promotion is the publisher doing? Do they send out free review copies, do they have contacts with review journals/blogs, will they make sure you're listed/advertised in industry journals etc. Many co-operative publishers will talk about the author having to do a lot of the promotion and marketing, which you will find takes up your time and probably money. Don't be fooled by those that talk about using social media - Twittering and Facebooking by itself can be fun but won't sell books if people can't find them.
5. How will you make back the money on your investment? For example, is the publisher giving you a very good royalty rate or do they encourage you to buy books at a discount and then sell them on? If the latter, then I'd recommend avoiding because it means that the publisher is almost certainly only interested in selling books back to you - which means they make even more money on top of your initial fee. If they're only paying royalties, then work out how many copies you'd have to sell to make back your initial investment and then ask the publisher how many books on average each of its authors sells. Most self-published/co-operative published authors sell on average 100 books. If your royalty is only 20% and you've paid over $1,000 then you've lost your money. Be wary also of how royalties are calculated - they should ideally be paid on cover price and not net but if it's payable on net then work out how they do the net calculation.
There are other points to think about as well, which other posters will probably deal with, e.g. experience of the people behind the company, capital funding etc.
I'll come back later with an analysis of the MGP website when I get the time but on a quick perusal the big red flag for me about this publisher is that they say they're willing to take poetry. There is no money in poetry except through selling back to the author and their friends and family.
MM