GP List price: $10 Discounted to $7.99
Amazon List price could be $10, or $7.99
If you put Amazon list price in at $10, they can/probably will price match GPs discount to $7.99 but you aren't violating your Amazon TOS because the list prices were the same. Ditto if you list your Amazon book at $7.99, it is lower than the GP list price so you are honoring the TOS.
So you start with the price you want to get for the book at Amazon, and raise up the GP list price to make sure you won't be price matched lowered than you want at Amazon.
Again, I come from a retail/consumer packaging background, so I use terms in specific ways. Your LIST PRICE should always be uniform across all retailers. This is a huge deal in the entirety of retail. In fact, pretty much every user agreement you agreed to to sell your book has some sort of verbiage in it that says you will not offer to sell the product at a lower price elsewhere. It is NOT just Amazon that has that statement in the TOS. They pretty much all do.
To understand this, you have to not think about "royalties" and think about "revenue." Amazon, Google, Nook: these are NOT your publishers. Despite them saying they pay "you" royalties, what they are really paying you is the difference between you list price and what you agreed to sell the book to them for. In normal retail terms, Amazon doesn't "pay" you a 70% royalty. You "sell" the book to Amazon for 70% of the list.
By setting different LIST prices at different retailers, you are actually engaging in fraudulent business practices. You are telling retailer one: My book's list price is $5 and telling retailer two: My book's list price is $6.
Put it this way: You and I both go to Toyota to buy a car. They have a "$2000 trade in guaranteed!" promotion going on. I come in with a nice trade-in, so the salesman says, "the car lists for $19,999, and you have a $2000 trade, so you final price is $17,999." But my trade-in is worth $2000, so it's all good.
You, however, have a shoddy trade-in. So the salesman says, "the car lists for $21,999, and you have a $2,000 trade, so your final price is $19,999."
THAT is the reason why list prices are supposed to be uniform across the board.
This is why I 'set and forget" my list prices and use other promotional tools to market instead of relying on "sales" that require that I lower the list price temporarily.