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One strategic move Amazon has been making that I haven't seen from any of the other major online retailers: They are aggressively courting self-published authors. They just rolled out their Amazon Select program, which offers authors added revenue and better distribution in exchange for keeping the book exclusive to Amazon.
If Amazon manages to shoulder the other players out of the market, I think it will have as much to do with their ability to make authors happy as with their ability to undercut other companies' prices.
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