Amazon.Com's CreateSpace is an excellent service for small and self publishers. It capitalises on the dominance that Amazon has in several markets, allowing books to be sold to their visitors without anyone holding stock. It's a print-on-demand service that obviates the need for publishers to print books that will, often, end up in boxes under the bed or pulped.

Let's be frank: most self-published material is self-published because publishers won't talk to authors who don't have agents and agents won't talk to authors unless someone they know asks them to. Many agents say openly that they will not even consider unsolicited manuscripts; many publishers say they will not accept manuscripts other than from agents.

So much good work - and infinitely more rubbish - ends up either vanity published or self-published.

I self-published How Not To Be A Money Launderer for the simple reason that I did the sums: I wanted the book on the shelves for GBP20 - a remarkably low price for a law book. My target audience was not law firms but non-lawyers caught up in the labyrinthine legal and regulatory mess that I could see was on the horizon as more countries passed ever more intrusive and complex laws to detect and deter money laundering. But the best deal I was going to get from a publisher was a royalty of 10% on product sold, and I would be charged for promotional copies.

But, if I sold direct, all I needed was to pay to get the book published (small run, about GBP7.50 per copy) and fix a price with a bookshop, and to fix the price on a firm sale basis not sale or return. That would reduce my margin but also reduce my risk: after all, what use is a box of books that have been kicked around in a store-room for several months?

The usual selling price to shops was about GBP12.50 and I bore the P&P which was about 50p per book.

So instead of GBP2 per book, I made GBP4 per book.

But the book also sold by what would now be called viral marketing and I sold many books direct, at the full price of GBP20. The margin on those, instead of GBP2 was GBP12.

Sure, we had to phone bookshops but mid-size chains stocked it and the terms of the large chains were unattractive so we didn't waste time on them. So the sales effort was not huge.

The book sold out its first print run - which a legal publisher regretfully told me would have been a big sale for one of their titles - and sold out its second edition, at a higher price and higher margins.

So, as a new book is on the stocks, the question is what is the most appropriate distribution channel. Obviously, not to consider Amazon's systems would be both churlish and stupid. And they have just updated their terms which look attractive.

If you can knock up the layout in your bedroom (or get a word processing whizz to do it for you) then there are no pre-production costs with the CreateSpace service. There are certain production specifications that your files must adhere to but these are not onerous. For a one-off payment of USD39, publishers can upgrade to a "pro" service which increase the proportion of the sale price they receive and which adds access to the "expanded distribution channel."

Amazon calls what it pays to authors "Royalties." But strictly, it's not, for Amazon.com/ CreateSpace is not the publisher: it is, in essence, a print/mail shop.

The good news for publishers is that, as others have entered the market, Amazon has increase the proportion of the sale price returned to the publisher - it can be as much as 70% for sales made through the publisher's own e-store but this falls to 30% for sales through the expanded distribution channel. But the expanded distribution channel is potentially impressive as it releases the books via third party bookshops.

So, that all sounds great, right? OK, so you have to purchase a proof copy of your book but you also get to buy your own book at a discount - a discount that is very competitive when related to print-only services elsewhere.

And when it comes to selling the book, the pricing is entirely up to you (subject to a minimum price to make sure Amazon's costs are covered).

So that's all good, or so one would think until you decide that it would be good to publish it as a Kindle book.

And that's where it all falls apart.

Kindle, also owned by Amazon, is a hand-held e-book reader. When a user wants to read an e-book, the book is downloaded via a dedicated wireless connection. The product is not globally available but its use is spreading with Australia recently added.

Kindle has increased the proportion of its sale price that it pays to publishers to 70%, up from 35% having seemingly responded to Apple's pricing structure for the iPad.

It's easy to publish to: just convert your book to html and upload it: Kindle's back-end software does the rest including applying DRM and geographical limitations if required. For Australia, where there is a nett book pricing agreement, this latter provision will, as we will see, become more important.

Also recently added was the long awaited facility for non-US publishers to use the service without the need for a US bank account.

Buried in a new terms and conditions document published 15 January this year, there is a provision that takes away from publishers the right to set their own prices.

It says "You will adjust the List Price as required to ensure that, at all times that the Digital Book is available for sale through the Program, the List Price does not exceed the lowest of: (a) the lowest suggested retail price or equivalent price for any digital or physical edition of the Digital Book; (b) the lowest price at which you list or offer any digital or physical edition of the Digital Book on any website or other sales channel; and (c) any maximum List Price we provide from time to time in the Program Policies... We or our sub-distributors have sole and complete discretion to set the retail price at which your Digital Books are sold through the Program... Provided you are not in breach of your obligations under this Agreement, we will pay you, for each Digital Book sold to a customer (i.e., an end user) through the Program, a royalty ("Royalty") equal to thirty-five percent (35%) of the applicable List Price for such Digital Book, net of refunds, bad debt, and any taxes charged to a customer or applied with respect to sales to a customer (including without limitation any value added or sales taxes). If your List Price for a Digital Book is higher than permitted under Section 5.3.1 above, we will be entitled to deem it modified so that it is equal to the maximum List Price permitted when calculating Royalties due to you under this Agreement."

What does this mean? In simple terms, Amazon.Com have the right to set not just the price at which they sell Kindle books but, if you have an alternative distribution channel, the price sold via Kindle must not be more than the price for which you sell your book elsewhere. This, then, means that publishers may not "remainder" hard copies at a price lower than that for which Kindle books are sold. Worse: Kindle will determine the price at which your book is sold and if you list it at a higher price in your e-shop, for example, they will pay commission, sorry, "royalties" only on the price you sell at.

But things are even more insidious: without modifying the contract terms, Kindle has announced that it is to increase the commission rate to 70% - but only on books selling for USD9.99 or less.

Amazon's new terms have already led to a serious dust-up with MacMillan, a company which, rarely, accepts unsolicited manuscripts and therefore is more likely than most to use a print-on-demand service for books that might not otherwise see the light of day. MacMillan's books were removed last week from Amazon.Com as MacMillan said it would not accept Amazon's terms. MacMillan wanted to charge USD15 for its Kindle books; Amazon said they would allow a maximum price of USD9.99. Amazon removed MacMillan's paper and electronic titles; MacMillan took out an advert in a trade paper explaining their side of the dispute. Yesterday, Amazon caved, saying that it would let the customer decide whether to pay USD15 for a book and that other publishers would compete.

The dispute goes further than that, though: for e-books, Amazon declares that it is a sub-publisher. MacMillan say "no you are not, you're a distribution channel." Amazon sees the sub-publisher route as allowing it to hold onto much greater control over the product and its revenue; MacMillan says that it's still just a print & post shop, just using a different method of posting. And on that basis, it should receive a reasonable fee for its services but not an entitlement to a share of the profits and certainly not to define the price point not just on its own service but elsewhere, too.

I'm with MacMillan: mine book is a specialist work and whilst I would love to see it on Kindle, it's a text book not a book to read on a train to work. And I demand to be paid a proper price for it.

So bye-bye to the idea of using Kindle for a book that will retail in softcover at about USD75.

I wonder what iPad will offer?