Can something based on other book (like Naruto or Harry Potter) be sold on Amazon or Smashwords?
If it's literally a derivative work, containing intellectual property owned by someone else, then no. You can sell followups to public domain works (so if you want to publish your Psyche the goddess from myth is seduced by Bob Cratchett from "A Christmas Carol" story, you're fine... and I sincerely want to know about it because I would so read that), but not derivative works based on IP still under copyright. This is why
Fifty Shades of Grey (which was originally self-published on Amazon) had to strip out its original fan fiction elements (Twilight characters, mostly) and replace them with Christian Grey and Anastasia Steele. Sometimes that means creating an 'expy' with similar but slightly different elements (Batman's under copyright? That's fine -- this story stars 'The Blood,' a vigilante who was a billionaire traumatized in his youth who uses horrifying vampire imagery to terrify criminals as he fights to clean up Arsenal City! Totally different guy!) and sometimes it means filing the serial numbers barely off (Batman's under copyright? No problem -- this story stars
Batsman. Brew Swain was the heir to a wealthy Cricketer who was murdered in front of him, growing up to... you get the idea.) The very slight name changes and the like are more likely to distract your reader, though.
At the same time... you may have noticed that the filmmaker Alex Braun (in particular, though far from the only one) produces pornography starring copyrighted and trademarked characters. When that happens, you'll generally also find the word 'Parody' in the title --
The Avengers XXX: The Alex Braun Parody, say. That's because parody is protected speech -- according to theory, any of us can write a
parody of Naruto and sell it. However, in a
practical sense, Wicked Video has a lot more money than most of us and are much better positioned to fight off a legal challenge. It's not a hill worth dying on, when you can so easily tweak the characters a little or a lot and then work from that.
The legality of free fan fiction, like a bunch of us write right here on CHYOA, is an open question in the American legal system. If DC were to send me a cease and desist over
The Luthor Agenda, I'd cease and desist pretty fast because I'm poor and they're huge, but it's not really been established if they have a
legal right to shut my story down. If I were to bet on a test case, I'd bet on the IP holders winning, mind. The thing is, most IP holders are indulgent of fan fiction because they recognize its value both culturally (yes really) and as implicit (and free) advertising. The 'deal' there is you don't make
money at it. When money gets involved, and you make enough noise about what's going on... then you end up with an
Axenar situation, with Paramount cracking down on
Star Trek fan films. (Not here to debate which side was right in that situation, for the record. It's just a convenient example.) If Amazon discovers that you're selling an unauthorized derivative work they'll pull your listing, and Smashwords will generally do the same.
This, by the way? Is why I have a
Patreon. I can't sell fan fiction, erotic or otherwise, but I can invite people to support my writing in general, and that gives me the time to write fan fiction which I post freely. Does that seem like splitting hairs? That's what happens in the American (and other) legal system sometimes. If I sold
The Luthor Agenda or
The Seductive Spider-Harem, I'd be directly infringing on DC or Marvel's intellectual property. If I post them for free here on CHYOA or on AO3, then I'm posting in that grey area fan fiction currently lives in -- having a Patreon doesn't inherently move my stories out of the grey area into the infringement end zone.
More than you wanted to know?
