Royalty rate calculation question in KDP

[andrewburt]

Hi all, got a question for Kindle KDP authors out there who might have stumbled across the answer to this.

Say one chooses the 35% royalty payment option (e.g. an enhancement to a public domain work), and you want to sell it for $.99, but are forced to choose a minimum price of $1.99 for selling an ebook (because it has a lot of illustrations making the file size exceed the threshold for the $.99 cent min. price). But suppose you actually wanted to choose $.99 for a price...

What happens if you sell the ebook elsewhere for $.99, and Amazon is told about it, thus kicking in the price match rules. As I read the pricing guidelines, under the 35% option if Amazon chooses to lower the price, they still pay 35% of the $1.99 list price even if they set the sale price to $.99.

Has anyone encountered a case like that, and did they actually then pay $.70 royalty on a $.99 sale with a stated "35% royalty"?

I realize this is a specialized situation, but I could see others bumping into it from other causes. (In this case, it's a version of Mark Twain's public domain INNOCENTS ABROAD with the several hundred illustrations added back in; the other editions lack them, but their inclusion creates a large file size, which triggers the $1.99 minimum price.) I'd rather sell it for under $1, but that isn't an option Amazon offers in this case.

(The same question would apply if one wanted to sell a title for less than the $.99 minimum price -- could one sell it elsewhere for the desired lower price, and let Amazon price match, but still get the $.35 royalty? An even more curious question would be: What if you sell it elsewhere for, say, $.25... would Amazon still really pay $.35 royalty if they price matched to $.25? Their pricing guideline for the 35% option indicates this... but... really???)

Anyone have any actual experience with this happening?