Short answer? Because Amazon wants to reduce their risk and maximise their profit. Jeff Bezos didn’t become a billionaire by making things easy for authors.

An ebook is so much less complicated than a paperback. No print, no paper choices, no logistics. It’s all profit! Yay.  This guide helps self-publishers, authors, and small publishers understand the real costs of publishing on Amazon KDP—especially when setting your eBook price. And yes, it’s more complicated than it looks.

Before you decide how much to charge for your book, you need to understand what you’ll actually get paid. Spoiler: don’t get excited, it’s not 70% of your list price.

The 70% royalty has a Catch

Amazon can pay you up to 70% in royalties. Sounds great, right? But here’s what they don’t put in the headline:

• You must price your book between $2.99 and $9.99
• You’ll pay delivery fees—yes, for an eBook
• You’ll also pay taxes, depending on the country
• Your book cannot be in the public domain
• Your eBook must be at least 20% cheaper than your paperback edition

Did you know: Amazon can change the price of your book, so you lose your 70% royalty

And they will reduce the price if:

• You offer the book cheaper on another platform
• They decide to run a promotion or match another retailer’s sale

If the price dips below $2.99, you automatically drop to the 35% royalty—even if it wasn’t your doing.

What is a Kindle eBook delivery fee?

Amazon charges $0.15 per megabyte (MB) based on the final, compressed file size after KDP processes your eBook. If your book includes lots of images, charts, or design elements, that file size can add up quickly. Think cookbooks, art books and travel guides!

The exact delivery cost isn’t visible until you upload your file and view the pricing page in KDP—but you can estimate it.

For example, a 15 MB file would cost about $2.25 per sale in delivery fees. That comes straight out of your royalty.

What about taxes?

Amazon deducts VAT or GST in most countries before calculating your royalty.

Here’s the formula:

• 70% royalty = (List Price – Taxes – Delivery) × 70%
• 35% royalty = (List Price – Taxes) × 35%

Taxes on Kindle eBooks in Canada

Good news: The U.S. has no VAT, so Americans get a cleaner royalty—just list price minus delivery.

In Canada, the federal government applies a Goods and Services Tax (GST)—or in some provinces, a Harmonized Sales Tax (HST)—to eBooks. This is treated just like any other digital product.

• Amazon handles collecting and remitting the tax to the Canadian government.
• You still need to report your earnings to the CRA if you’re a Canadian author.

The buyer pays the tax, but you, the author, absorb the cost because Amazon deducts it from your royalty payment.

When someone in Canada buys your eBook on Amazon.ca, Amazon adds GST or HST to the list price at checkout, depending on the buyer’s province. The tax is subtracted from your royalty calculation, even though the reader paid it.

What about Kindle Select and Countdown Deals?

If your book is in KDP Select, you can run Countdown Deals that drop the price below $2.99, while still keeping the 70% royalty. Without KDP Select, if you drop the price below $2.99 manually, you’ll only get 35%.

Some countries—like India, Brazil, Japan, and Mexico—only offer the 70% royalty if your book is enrolled in KDP Select (Amazon’s exclusivity program). Otherwise, you’re capped at 35%.

So when should you choose the 35% royalty?

This might be the better option for:

• Heavily illustrated books
• Very short books
• When you wanted to price it under $2.99 as a loss leader.
• When you believe you can sell at well over $9.99

What you get with the 35% royalty rate

• No delivery charge
• Lower minimum/maximum prices
• Less tax complications and surprises
• Fewer restrictions
• But: You make less per sale

Aggregators vs Direct Publishing

Don’t want to deal with all this? You could use an aggregator like Draft2Digital, IngramSpark and PublishDrive

They’ll upload your book to Amazon and other retailers for you—for a fee. But here’s the catch:

• You’ll lose a cut of your royalties
• You’ll lose control over sales reports and promotions

If you’re using an aggregator, opt out of their Amazon distribution and upload to Amazon directly. Your wallet will thank you!

Final Thoughts (and one-on-one help)

Amazon’s pricing system is supposed to tempt you—especially that 70% royalty. But as you’ve seen, there’s a long list of terms, exceptions, fees, and country-specific rules.

Want to skip the mess?

Let me help. I work with authors to upload their eBooks to Amazon KDP, optimise pricing for the right REAL commission, and make sure you’re not leaving money on the table. You wrote the book—don’t let the upload process ruin it.

🚀 Book coaches & publishing professionals: I’d love to work as part of your self-publishing team on book marketing: author websites, book pitches, and book listing optimization for Amazon and IngramSpark.