Pre-orders are a great way to cut out the middle man and help both the publisher and the customer. Publishers usually offer the pre-ordering customer a discount in return for either cash up front (helping to pay for the production) or a commitment to buy the game direct from the publisher.
Pre-ordering helps the publisher by providing them with more income that they would get selling the games through shops and distributors and also providing early return on investment. Normally, selling to distributors it's at least a month after delivery that the publisher will see any money, since the usual invoice terms are NET30 (payable 30 days after invoicing). In the case of cash up front (which I don't do!) it also allows the publisher to part-finance the production of the game using customers money - which reduces the risk. It also gets some copies of the games out in the hands of the playing public very quickly - which will hopefully lead to quicker referral sales where someone who has played someone else's copy wants one of their own.
Pre-ordering also helps the customer - it allows them to get the game cheaper than retail price, and sooner than they would be able to through the shops.
Sounds great so far - who doesn't it help? The shops and distributors that have been cut out as middlemen! Although, if the early copies that went to pre-orderers get played and lead to more sales then it will indirectly help them. Obviously, once the game has widespread distribution continuing to sell it at a crazy discount from the publishers website will really hurt the shops, since the publisher can definitely sell it cheaper than shops. For that reason, once the game is available most publishers close their pre-order offers, so as not to undercut the shops who are also their customers.
My pre-ordering process has always been: I offer a 30% discount to anyone who signs up before the game arrives at my warehouse. Once it has arrived, I email everyone who has signed up offering them the chance to pay (and get the cheap copy), or ignore it - no obligation to buy. It's all done using PayPal buttons and a hidden webpage (a page on my website with no links to it, other than the one in the emails I send out). I also offer free delivery to anyone who wants to collect the game at a forthcoming convention.
Seeing as there's a credit crunch on and everyone is feeling the pinch - I've decided to increase the pre-order discount on Sumeria to 40%! Yup, if you pre-order you get it for £15 instead of the usual £25 (plus postage and packing). I had hoped the exchange rate between the GBP and the Euro would enable me to reduce the retail price of Sumeria from £25 to £22 (same as Carpe Astra) but unfortunately nothing is doing on that front so I'm doing this offer instead to help out my most loyal customers. If you're interested just send me an email. If you've already pre-ordered, don't worry, you'll get the extra discount too.