A little over two months ago the UK stopped collecting VAT on ebooks sold in that country, and I have just learned that Amazon may have lowered the UK Kindle Store’s minimum price threshold in response.
Previously Amazon had required a minimum retail price of £0.99 for all ebooks in the Kindle Store. Any ebook priced between £0.99 and £1.99 earned a 35% royalty, and ebooks priced between £2.00 and £9.99 earned a 70% royalty (less Amazon’s punitive “delivery” fees).
Under the new rules, the minimum thresholds has been lowered to £0.77 and £1.77, respectively. (The £9.99 threshold remains unchanged.)
If you have not adjusted your prices in the Kindle Store, now might be a good time to do so. (To be honest I thought Amazon had taken care of that automatically when the change in VAT went through.)
When I first heard about the change, I thought Amazon was responding to the devaluation of the pound. But after talking to Dan Holloway on Twitter, I have to agree that this change is probably the result of VAT cancellation.
Will you be lowering your prices in response?