I'm curious to know, and who pays for it?
The meaning is obvious, isn't it?
Anyone buying a copy pays for the manufacturing cost and the author's royalties, while the author buying a copy of his own book only pays for the manufacturing cost. To both are added tax and postage.
One keyword there is "anyone". That means that us as self-publishers do not have to pay the Cost of a book when anyone else buys it, anywhere. The buyer pays it (and the shipping) from Amazon for example, and we get whatever we added to it as a profit.