99 cent Kindle ebooks theoretically earn their authors a 35% royalty from Amazon but it’s actually possible to double your money and make 70% on a 99 cent ebook.
Amazon ebooks sell for a minimum of 99 cents, which has proved a popular price for self-publishing authors building a readership by making it cheap for readers to take a chance on them. Others, like John Locke, have built successful self-publishing businesses by writing popular fiction quickly and making their money from selling in volume. 35% is not a bad profit margin, after all.
So how did I make 70% from Amazon on a 99-cent Kindle book?
Sometimes I make mistakes. This won’t surprise anyone but it will surprise many who know me to find out that I know I make mistakes. 
One boob was to raise the price of my Sydney self-guided walks on Amazon from 99 cents to $2.99 without doing the same on Smashwords.
I have two Sydney walks for the Kindle. I’d put one of them on Smashwords as an experiment. Smashwords distributed the books for me to the iBookstore, Barnes & Noble and Sony. Because sales were pitiful, I didn’t bother putting anything else on Smashwords and forgot all about it.
When you select the 70 per cent royalty option from Amazon you agree that Amazon can automatically match the cheapest price it finds elsewhere for your book. This is fair enough and the reason is clear: Amazon wants its customers to know they’re always going to get the best price in their store.
My book was still selling for 99 cents, so nothing had changed in that regard, but the way the price was displayed changed. Now readers could see the book’s list price was $2.99 but it was discounted to 99 cents so readers were “saving” $2 even though they’d only ever been paying 99 cents.
This could have a secondary benefit of emphasising to readers that they’re getting a bargain. Where John Locke’s readers are told the book is 99 cents and that’s it, mine were being told they would be paying 99 cents and saving $2.
You’re not getting 70% of the list price ($2.99 in my case) but of the discounted price (99 cents for me). In my case, this wasn’t great because I wanted the book to be $2.99 and to be making a $2 royalty.
How can you make a 70% royalty on your 99-cent ebook?
- List your book for between $2.99 and $9.99 in the KDP
- Choose the 70% royalty option
- List your book through Smashwords for 99 cents
- Amazon will eventually “find out” the discrepancy and start discounting your book to the Smashwords price
- All your readers are still paying 99 cents wherever they buy your book (Amazon, Smashwords, iBookstore, etc.) but you’re making twice as much in royalties on your Kindle sales
This isn’t an exact science. You’re relying on Amazon locating your book elsewhere and deciding to match the price. Assuming that happens, this should work.
It was explained to me by a KDP rep via email thusly:
The price at which we sell your book may not be the same as your list price. This may occur, for example, if we sell your book at a lower price to match a third party’s price for a digital or physical edition of the book, or Amazon’s price for a physical edition of the book. In this case, if you have chosen the 70% option for your book, your 70% royalty will be calculated based on our price for the book (less delivery costs and taxes).
And it’s also documented on the KDP page about its pricing terms and conditions.
I don’t want my books to go for 99 cents but if I did, this is definitely what I would be doing to maximise my royalties.
Do you have a pricing strategy? What have you noticed when you change your price?
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