Tim O'Reilly just tweeted about Amazon's new Kindle Direct Publishing (KDP) program. This program enables authors to self-publish and have their eBook titles sold by Amazon. Authors are likely to be confused by Amazon's self-publishing options, for these reasons:
First, there are two royalty rates in the KDP program: 35% and 70% of the list price. To get the 70% rate, you have to give Amazon an exclusive on the eBook versions of your titles (you're allowed to sell the eBooks on your own website, but priced no lower than Amazon's price.) You also have to price the eBooks at least 20% less than the least-expensive print version of the same titles. In addition, you must support all the features that Amazon enables with the Kindle (text-to-speech, book sharing, etc.). If you fail to do any of these things (or don't meet other qualifications), Amazon will pay you on the 35% royalty schedule. Even with the 35% royalty, you still have to give Amazon "most favored nation" status on pricing--you can't sell eBook or print versions of your titles anywhere at a price lower than Amazon's price.
In other words, unless you give Amazon an exclusive and monitor all of your resellers daily in order to keep Amazon's list price the lowest, you could find yourself getting a 35% royalty with no recourse. Not such a great deal if you had expected to get 70%.
Another area of confusion is that Amazon has operated a self-publishing business, CreateSpace, for years. What if you want to distribute your title both in print and as an eBook? You have to work with and enter into separate agreements with both Kindle Direct Publishing and CreateSpace. What if you'd like to take advantage of the promotional packages and design services available from CreateSpace for your eBook? Too bad--CreateSpace only works with print versions, and Kindle Direct Publishing doesn't offer those services. Why aren't both programs unified in a single self-publishing program for eBooks and print? Ask Amazon, because it certainly doesn't make any sense to an outside observer.
I suspect that as more word gets out about the "gotchas" and limitations of Kindle Direct Publishing, publishers like Tim will have less and less to worry about.