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Thursday, January 21, 2010

Amazon has a deal you cannot refuse

Amazon is yet again shaking up the world of books. To promote sales of electronic books to the Kindle, they are offering a 70% royalty to authors. For those unfamiliar with how much authors make, this is a huge increase. Of course, accepting the new 70% terms come with a catch.

The terms to accept this benefit are not what most would guess. Amazon is not trying to force writers into only distributing through them, but is trying to make Kindle purchases more attractive to buyers. To receive the increased royalty, the book must be priced between $2.99 and $7.99, and must be priced 20% less than the listed price for the physical book.

Faced with the same circumstances, many other companies may have tried to force exclusive deals to make their device more attractive. But this plan makes the product more attractive to both customers and suppliers of the content, which should pay off in the long-term for Amazon. When customers and suppliers are happy, it makes a much better business.

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