I'll leave the editing questions for Ookla. Here is some input from when I did the whole bookstore thing:
When you buy a book a x% off, the author still gets his or her cut of the sales. Generally their contracts are tiered. For hardbacks, lets say they get 15% of the cover price in royalties for the first 20K books sold. Then for every book sold after that initial 20K, they get 17% of the cover price. The remaining amounts go towards covering any expenses incurred in the printing of the book - printing, marketing, yada yada. Those fees, I imagine, vary from book to book. When the novel goes into paperback, the royalty percentage drops down a lot lower because the profit margins are WAY lower on paperbacks. They make their money by selling in sheer numbers. An author might get 5% royalties on the cover price for the first 50K paperbacks sold, then 6% for any sold after that. The other thing to realize is that author do not actually receive any of these royalties until those cumulative earnings pay back the publishing house for the advance they gave the author. So, the bonus for authors who sell more than expected? First, they make higher royalties, and pay off their advance faster. Second, the better they sell, the more likely they will receive better subsequent contracts. Then it all snowballs, and you get more and more royalties with bigger and bigger contracts. Good stuff.
Did that sound more or less how you know it Ookla?
Now, as for buying the book at 40% off, you realize the real reason for that is to build loyalty and entice you to buy additional books right? Do you remember when the last Harry Potter book came out, and stores were selling it at 50% off or higher? That is a direct financial loss to the bookstore. They typically buy books like that for 46% off the cover price. The thought there is that if you can entice customers into buying the main book for 40-50% off, you can then get them to spend those savings on another book with no discount attached. The money-phrase in bookstores is "Units-Per-Transaction." A store with high "UPTs" will make those losses taken on heavily discounted books turn into profits - assuming the bookstore salespeople know their stuff (which is rare these days).
As for splitting a book, the bookstores don't have a direct say. By direct i mean the publishes don't call up Borders and say, "Gee, do you need us to split the book?" The publisher decides how they will best cover their costs and make the most money. if that means splitting the book, then so-be-it. Now, part of that means they look at bookstores and say, "Well, considering the shelves at bookstores are X long and Y wide, the hardbacks and/or paperbacks need to be split in order to fit Z number of copies. If we DONT get Z number of copies on the shelves, then we lose exposure, and we may lose money."
That help at all?
And Ookla will slap me into place if i messed up anywhere. Ookla and I tend to have awesome discussions about this stuff when we get together every now and then.