Amazon have no control over ebook pricing, it's set purely by the publisher. For physical books Amazon buys them from the publisher and resells them at whateve

Amazon have no control over ebook pricing, it's set purely by the publisher. For physical books Amazon buys them from the publisher and resells them at whatever price they want (including at a loss), hence they often discount physical books from the cover price. With ebooks Amazon uses the agency model where they just get a fixed percentage and can't change the book price. The Economist did a series of articles about ebooks last week where it discussed how publishers took this approach to stop what happened in the music industry where Apple essentially changed everyones expectation of how much they should expect to pay for music. Here's Amazon's article about it: http://www.amazon.co.uk/forum/kindle/TxDO7PSRZ3YTZD http://www.amazon.co.uk/forum/kindle/TxDO7PSRZ3YTZD