I can't talk for the big boys, Michael, but, as an independent publisher, I can respond with confidence: "with difficulty".
I supply NewCon Press titles to a number of book stores, mostly specialist genre ones, although I'm just in the process of finalising a deal with Waterstones, one of the biggest chains here in the UK.
The discount I sell at varies between 35% and 50% for the very largest (Forbidden Planet etc). On top of this, shipping comes out of my own pocket. The same sort of margins apply to sales via online retailers such as Amazon.
At the lower end of the discounts, this means that profit margins are very small, at the top end it means that, for many titles (particularly the paperbacks) they're non-existent.
From my perspective, selling this way achieves two things:
1. It raises the profile of the book.
2. It shifts stock and frees up cashflow.
I don't expect to make enormous profits this way. Since a high percentage of books are sold either from the website or at events such as conventions, the books still remain profitable, but I know I'm not going to get rich doing this. The reason I do it is that I love genre fiction and am very proud of the titles I've released to date, which have garnered several awards and honours. If I can manage to do that without actually going broke... I'm happy!