Does Amazon penalize you for selling the same product less elsewhere? Just a note that you should check out the agreement with them. I wasn’t selling e-books, but I do run a business selling jewelry through their marketplace, and because I was offering the items cheaper on another site, they shut my account down for several months and cost our company thousands in lost sales.

Nope. Only if that book is enrolled in their KDP Select program, which it no longer is. The tactic I am using called “perma-free” by self-publishers has been used by others with some degree of success.