Amazon professes a commitment to offering customers rock-bottom prices, yet Amazon is the only ebook retailer to restrict the ability of authors and publishers to price at FREE.

The only officially sanctioned method of pricing an ebook to free in the Kindle store is for authors to enroll their books in KDP Select, an optional program that requires exclusivity.  Exclusivity is great for Amazon, but it’s not so great for indie authors who want to maintain their independence and build a diversified revenue stream and readership across all retailers.

Amazon allows KDP Select books to be priced at free for only five days per quarter.  That’s not enough time for authors to take full advantage of the amazing promotional magic of free.

Every month I meet writers who think the only way to take advantage of free at Amazon is to enroll in KDP Select.  Not true.  If you know writers operating under this mistaken belief, please share this post with them.

There’s another, better option, and it doesn’t require exclusivity. Smashwords and our retail partners can help.

In this post, I’ll teach you a trick veteran indie authors have been using for several years to do free and perma-free ebooks at Amazon without exclusivity.  It’s a way to turn Amazon’s price-matching robots against Amazon.

As you’ll learn below, authors who avoid KDP Select can make greater use of free than those who are trapped in KDP Select.

It’s a simple process.  Here are the steps:

1.  At your Amazon KDP dashboard, price your book to $.99.

2.  At Smashwords, price your book to free.

3.  Within hours, iBooks will reflect the new price of free, and B&N and Kobo will follow within 1-2 business days.  Next, visit your book page at Amazon and click the link under the “Product Details” box labeled, “tell us about a lower price.”  There, you or a friend can click the button beside “Website (Online)” and report that your book is available for free at another retailer.  In that form, provide Amazon a direct hyperlink to one of the Smashwords retailers.  A link to Apple or B&N is a good bet.   I don’t think they’ll price match against the Smashwords store.  See the screen shot below.

A.  If your book is priced $2.99 or over and enrolled in the 70% royalty rate and you price at free elsewhere, Amazon will send you one of their lovely fire-and-brimstone emails where they’ll threaten to kick you out of KDP for your transgression (the 70% royalty rate requires you not price your book lower elsewhere). But books enrolled in the 35% royalty rate (automatic for 99 cent books) don’t get the nastygram because price parity elsewhere is not a requirement.

B.  Some authors ask friends or fans to report their books. I don’t know if it makes a difference.

C.  Note that Amazon operates about 13 different stores, so you may want to report the book separately at their largest English-language stores (US, UK, Canada, Australia) to encourage price matching in each store.

D.  Amazon will often price match even if you don’t do the self-reporting.

E.  Sometimes Amazon will not price match, even if you or a reader report the lower price elsewhere. They know indie authors use this trick to gain better control over their pricing.

WHY SHOULD YOU PRICE AT FREE?

Every author is well-served to experiment with free – either with temporary free promotions or with permanently free (aka perma-free).  Why?  Because free builds readership, and some of those readers will fall in love with your writing and purchase your other books.

Free turbocharges your readership by eliminating the financial risk a reader takes on an unknown, untrusted author (and that’s you until they know and trust you!).  Free allows the reader to read you risk-free, and gives your writing a chance to earn the reader’s trust and admiration.

I’ve been promoting the use of free ever since we launched Smashwords in 2008.  Smart use of free has catapulted many Smashwords authors to the bestseller lists.

At iBooks, free books get 41 times more downloads on average than books at any other price.

If you write series, definitely price your series starter at perma-free.  Why?  Because series with free series starters earn more overall sales than series without free series starters.

Even authors who only publish standalone books can benefit from free.  For many first-time authors, one of your biggest challenges is to get your first readers and your first reviews at retailers.  Free builds readership and can help you establish your first reviews at the major retailers.  Or, if your book has been out a long time and sales have dwindled, try a temporary free promotion to rev up readership, reviews and word of mouth.

If you have a standalone book on preorder, you can price another standalone book at free to drive up readership, and then use the backmatter of that free book to advertise your preorder (at the end of every book, you should provide a listing of your other books).

Free is not a guarantee of readership.  A few weeks ago I received an email from a Smashwords author who priced his books at free yet he was still struggling to attract readers.

The reason: there’s a lot of competition out there.   Although free is a powerful catalyst for building readership, free works best if your book is a super-awesome WOW book that turns that excites the reader.  WOW books average 4.5 to 5 stars out of 5.  Just because a book is free doesn’t mean the reader will read it or finish it.  On the contrary, they’re probably less likely to finish a free book if it doesn’t hold their attention on every page.

Bottom line, if you want to turn a free downloader into a paid reader, you must earn the reader’s awareness and trust.   First build awareness, then build perception.  Free helps the reader become aware of your writing.  Perception is formed based on the true merits of the product.