Selling your stuff: Consignment
The consignment set up goes something like this: You, the publisher, ask the bookstore to stock your zine or chap. (Many stores have special sections for zines, chaps, and other consignment items. If you're dropping by for the first time look for this shelf or rack to see what kind of things they might be into and whether you'd be a good fit.) The bookstore agrees to take a small number of copies and put them on display. You and the bookstore enter into either a written or verbal agreement about the terms. Generally they will not be responsible for lost or damaged copies. You will be required to check in on them every once in a while (perhaps according to a set schedule, either by calling or coming by) and restock as necessary, deliver new issues, etc. When you check in, if you've sold copies they will pay you a portion of the cover price for each, and keep a small percentage. (For instance, they might pay you 60% of the cover price and keep 40%.) All unsold copies will be returned to you.
Some tips: Let the store know that you will send people their way--either via your web site or annoucements at your local readings, etc. Offer them a flier, poster or a stack of postcards for the counter to draw the attention of browsers. In some cases you may want to offer a complimentary review copy and check back later, to give them a chance to check it out.
Expanding into other cities: Unless your focus is strictly local, there's no reason you can't try to market your publication in other cities. For instance:
Quimby's in Chicago is a great bookstore open to selling zines and chapbooks on consignment. Here's their info page and the form you'd need to submit to get started. (Their Consignment Terms & Form is a good example of what you might run into elsewhere.)
Atomic Books in Baltimore is another great bookstore that carries DIY zines and books. Check out their info page here. (See "consignment inquiries.")
Zine & E-Zine Resource Guide: A list of stores that carry zines, with links to their individual sites and descriptions of what they carry and how to order. Check it out.
Ask friends in other cities for their suggestions. And bookstores are not the only places you can try to interest in consignment deals. Record stores, comic book stores, vintage clothing stores, newsstands, and some coffee shops are all worth a shot too. (Chain bookstores for the most part will not be willing to work with you on consignment.)