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Another possible strategy, other than repackaging public domain books, is to sell Private Label Rights books. I've never bought one, but I was initially intrigued by the number of essentially identical books I found on any given topic when doing a search. I've seen several "authors" with boatloads of PLR books that they've priced at $2 and up. Amazon doesn't seem to have a policy on these, since I've seen loads of them there.
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