I've released one novel with a pre-order some time ago but didn't feel any great lift from it, only a couple took advantage. I see little advantage for the reader. Today I uploaded my 13th novel in the series and chose pre-order again. If this one doesn't do much I'll revert to instant publication in the future. I do understand the differences between pre-orders through Smashwords (and their venues) and Amazon, as far as ranking, but ranking is such a fleeting thing, I've always doubted it does much good.
What do you think of the pre-order concept? Maybe good for James Patterson but not Joe Shmo?
Whether pre-orders do anything for you is largely a function of your fan-base and what sort of promotional work you do during the pre-order period. Merely putting a book on pre-order is not likely to accomplish anything by itself.
I don't see the cannibal thing for pre-orders, but I tend to agree that it helps only if you have a dedicated fan base and/or have done a lot of spadework promoting. The main drawback I see for Indies: the loss of sales for the period of pre-orders.
Amazon's policy on this has not been made clear, as far as I know. But the concern about cannibalism is whether the pre-order sales are counted as part of your release-day sales or not. If not, it could hurt your ranking on that day, and maybe even keep you off the top of the Hot New Release List for your genre or sub-category.
Two weeks ago I released my second book. I decided to put it up for pre-order for one week, thinking that it would give the book extra visibility. It did just the opposite. I got zero pre-orders. Evidently, Amazon counts pre-order status no differently from being on sale (with regards to sale ranking). So when the book finally went on sale, it was ranked very low - less than 200,000. In the last two weeks after pre-order, I got maybe three sales.
If you don’t succeed in generating any pre-order sales, a history of slow sales will hurt your book’s visibility. Also note that there's no way to view a pre-order book on Amazon unless you do 1 of 2 things...
1. Advertise outside of Amazon and link directly to the pre-order page.
2. The potential buyer must enter in the exact name of your book title on Amazon. (it's not visible on category searches)
I recommend reading this blog: https://chrismcmullen.wordpress.com/2014/09/22/to-pre-order-or-not-to-pre-order
In regards to the cannibalizing release-day rankings: I have only tried the pre-order once, and had 81 preorders over 10 days (the minimum number of days KDP allows for pre-orders). It hit the HNR list for Western Romance while it was a pre-order and had decent rankings, hanging around 14k to 16k. Release day came, and all those pre-orders became completed sales with a handful of additional sales (maybe 10?). Rank jumped the 8k range. Now, if all those books had been bought on the same day (as with a regular release without a pre-order), the rank would've been MUCH higher. Maybe the 2-3k range.
Best as I can tell, pre-orderes do dilute release-day ranks, BUT because the Amazon algorithms include previous days' (even weeks') sales/pre-orders, it isn't a straight-out cannibalization. When the sales were finalized on my pre-order, the ranks did jump… and more than could be accounted for by those 10 additional sales on release day.
Personally, the only real benefit I can see for us smaller fish is the solid release date—being able to tell our fans that, hey, my new book will be out on date, and know that it will be available rather than hitting "publish" and playing the "will it take two hours to publish or will it take three days to publish" game. I publish on Amazon, iTunes, BN, and Kobo, and it's nice to be able to coordinate my book launch across all vendors. Yes, I even get to set pre-orders and release dates on BN, too, now. It makes notifying fans a lot easier… and is one more element of "professional publisher" to our toolbox.