A Publisher's Conversation with Authors: When Amazon Raises the Price above List or Sells below Cost

 

t is Tuesday. Monday's madness is over, and Wednesday will take us over the hump, so Tuesday it is--for some serious discussion with authors. Tuesday talks mean to address authors in waiting and self-published authors who would like to go a more traditional route or who would at least like to take their steps with a publisher by their side.

This week we look at a couple of troubling situations we recently encountered. In a familiar but frustrating scenario, one of our titles, listed at $16.95, was suddenly selling on Amazon for $23.25—a 37% markup. Meanwhile, Barnes & Noble continued to list the book at the correct price. The author, understandably, was concerned: he wanted to email his large mailing list with a launch announcement, but linking to Amazon risked alienating readers with sticker shock. Why the price change?

At the same time, we had an author whose book usually retails for $24.95 who suddenly found it selling for $10. This made it difficult for her to sell the book at list at her workshops--and $10 was below cost. What was going on?

🧠 Why Amazon Raises Prices Above List

Amazon’s pricing is governed by dynamic algorithms, not by publishers. Even if your distributor (like Ingram) transmits the correct metadata—including list price—Amazon retains full autonomy to adjust pricing based on:

• Demand spikes: Our book was trending at #37 among hot new releases, which likely triggered a price hike.
• Sales velocity: Fast-moving titles often prompt Amazon’s algorithm to raise prices in real time, especially if the system detects that readers are buying regardless of cost. It’s a classic case of supply and demand—except the “supply” is digital and the “demand” is inferred from clicks, conversions, and even page views.
• Third-party sellers: Sometimes, Amazon’s own inventory runs low or sells out, and third-party sellers step in. These sellers can list the book at any price they choose. If Amazon’s algorithm sees that customers are still purchasing at the higher price, it may not intervene.
• Marketplace testing: Amazon frequently experiments with pricing to find the “sweet spot” that maximizes profit. This can result in temporary price hikes that seem arbitrary but are part of broader A/B testing strategies.

📉 Why Amazon Lowers Prices Below List

On the flip side, Amazon may also slash prices—sometimes dramatically:

• Competitive positioning: If a book is available at a lower price elsewhere (including from other sellers on Amazon), the algorithm may drop the price to match or beat the competition. This is especially common with titles that have wide distribution through Ingram or other wholesalers.
• Inventory clearance: If Amazon has overstocked a title or anticipates low demand, it may discount the book to move units. This can happen even with new releases if early sales are sluggish.
• Algorithmic bundling: Amazon sometimes lowers prices as part of a broader strategy to encourage add-on purchases. If your book is frequently bought with another title, the system may discount both to increase cart value.
• Retailer discretion: Amazon is not bound by the publisher’s suggested retail price. They can—and often do—set prices based on their own internal metrics, including customer behavior, seasonal trends, and promotional cycles.

🔍 So What Can Authors Do?

• Monitor listings: Keep an eye on your book’s pricing across platforms. Tools like BookLinker or Author Central can help you track changes.
• Communicate clearly: If you’re launching a book and notice a price spike, consider linking to alternative retailers or your publisher’s site. Let your readers know where they can find the best deal.
• Educate your audience: A brief note in your newsletter or social media post explaining that Amazon’s prices fluctuate independently can help manage expectations and build trust.
• Stay calm: While frustrating, these price changes are usually temporary. If your book is selling well, that’s a good problem to have—even if the price isn’t ideal.

Bottom line: Look at these fluctuations not as glitches, but as signals—indicators of interest, momentum, and market behavior. And while you can’t control Amazon’s algorithms, you can use the knowledge above to navigate them wisely.

The Tuesday talks reflect real discussions between the management of MSI Press LLC and our own authors or those would-be authors who come through our doors but don't make the cut--yet. If you have a topic that you would like addressed, leave the question in the comment section. Chances are, in our 22 years of publishing first-time and experiences authors, we have had a conversation with one of our authors that we can share with you.

 See more Publisher Conversations with Authors HERE.

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