I followed a web page by Jeffrey Yamaguchi to get here because he made no distinction between POD publishing and subsidy publishing. The fact is, nearly every academic press and every major trade publish some portion of their lists using POD, and these books have no problem getting into bookstores. The reason? The publishers offer the trade discount, accept returns, and promote the books.
I've been a trade author since 1997 and make a good living at it, but I started publishing my own books through Print on Demand a couple years ago. I simply got sick of the lousy contract terms and relationships the trades offer work-a-day authors. I went direct with Lightning Source, the same Print on Demand provider used by most of the academic presses and the big subsidy presses. My first year I netted around $15K, this year it's around $30K. I offer a short-discount, so I don't get into stores.
I felt so strongly about the whole thing that I wrote a book on the subject (what else would an author do), but around half of it is online on my website, included a detailed case study of Lightning Source Print-on-Demand worked out for my first book; costs sales, etc.
http://www.fonerbooks.com/pod.htmI'm not suggesting that it will work for anybody, you have to be able to promote your books, or you'll never sell any. The value of being on bookstore shelves is highly overrated. Almost two thirds of my sales came through Ingram distribution, customers special ordering my books through their local store after my website or word-of-mouth got them interested.
Morris