Here is a very interesting article I found elsewhere. Unfortunately the original post has been taken down, so here is the text:
How To Sell Your Kindle Book Free On Amazon
by Michael Hicks.
One of the most potentially powerful promotional tools you have is to get one of your Kindle books sold for free in Amazon’s Kindle Store. I’m not sure how much this is going to really help you if you only have one book out, unless you simply want people to read your book but don’t care about making any royalties: if Amazon discounts your book to $0.00, you won’t be making any money from it (at least I’m not!). Personally, I’d recommend you keep your book at something like $2.99 (depending on a number of factors) and promote it while working on your next one, but that’s up to you.
If you have a series of books, however, selling your Kindle book free on Amazon can be a tremendous way to boost the reach of the first book of a series as a loss leader. Such a book can be used as sort of a super-sample that can help get readers interested in both your series and you as an author. And if they like what they read, they’re pretty darn likely to buy your other books! This is what happened with IN HER NAME: EMPIRE, which was dropped to $0.00 last week (as I write this) and resulted in a nice boon to sales of the other books in the series after EMPIRE “sold” over 13,000 copies in the first six days and went as high as 18 in the top 100 free books in the Kindle Store. Sweetness.
Now, what I’m about to tell you here isn’t any huge secret, and it’s really more theory than verified scientific fact, but here’s how I think you can coax Amazon into giving away your Kindle book. This assumes you have your book published to the Kindle Store via Amazon’s KDP; I don’t think this will work otherwise. You can also try to use this method to drop the price on Amazon below $2.99 while retaining a 70% royalty option (minus your book’s delivery charge, remember). To do this, instead of setting the price to $0.00 in the method below, you just substitute whatever lower price you’d like to offer (e.g., $0.99, $1.99) below the price you set in KDP. I’ve done this, and while it’s not foolproof, it seems to work most of the time.