Updates to Amazon’s Book Ranking Algorithms: The Death of 99-Cent Ebooks? An End to KDP Select Perks?

Ever wonder how Amazon’s ranking algorithms work? Why one book gets recommended to readers and another doesn’t? The difference between the popularity lists and the bestseller lists? Well, indie author Edward W. Robertson doesn’t work for Amazon, but he’s a stats junkie who’s been studying the e-seller’s algorithms for a while. Today, he’s here to answer questions on how books get ranked and recommended along with new changes that could punish 99-cent titles and take some of the appeal out of the KDP Select program.

Amazon Algorithms Examined

You seem to enjoy studying how Amazon’s algorithms work for ranking and recommending books. Before we talk about what’s new, could you give authors an idea of how things work, at least insofar as you know? What goes into ranking a book and causing it to appear on such-and-such bestseller list? Also, what’s the difference between the bestseller lists and the popularity lists?

Yeah, studying these things is a lot of fun for me. I don’t have any formal training in numbermancy (which I’m pretty sure is the term), but spending the last 10-12 years reading about the statistical study of baseball appears to have taught me a few things about data analysis. Perhaps I wasn’t wasting my life after all!

On to the lists. Everyone who’s spent much time on the Kindle store has seen both the bestseller and the popularity lists. The bestseller list is the Top 100 of a given category of books. For instance, here’s the bestseller list for Epic Fantasy.

The popularity list is the list of all books in that category. Here’s the popularity list for Epic Fantasy.

What you’re currently seeing on those lists will depend on when you’re reading this, but you’ll note they aren’t identical. That’s because they differ in key ways. The bestseller list is essentially a gauge of how many copies a book has sold over the last 24 hours. It takes longer-term sales into account to a degree, but the last 24 hours are far and away the most important factor. A book can rise and fall extremely swiftly on the bestseller list.

The popularity list is more complicated. For one thing, Amazon changes the formula for how it’s calculated a few times a year. Currently, to the best of my knowledge, the popularity list is the accumulated sales of a book’s last 30 days compared to those in its category–but free books given away only count for roughly 10% of a paid sale, and price is factored in as well, in that the higher your price, the more each sale counts for on the list. Lastly, borrows aren’t counted as sales for purposes of popularity list rank. The formula looks something like this:

(sales + (0.1 x free downloads)) x (unknown sales factor) / last 30 days

A simpler way to think about it is gross revenue earned by your book over the last 30 days (with an additional boost depending on how many copies you’ve also given away). I’m not sure that’s a 100% accurate way to put it, but it fits the data we’ve seen well enough to work as shorthand.

In short, then, appearing on the bestseller lists is mostly all about having sold a bunch of copies in the last 24-48 hours. To appear high on the popularity lists, however, you need strong sales (or an extremely strong giveaway) over the last 30 days. Additionally, the higher your price, the fewer books you’ll have to sell to do well on the popularity lists; the lower your price, the more you’ll have to sell.

That’s a lot of information! What is the popularity list actually used for? It sounds like that’s what the changes are effecting, but, as a shopper, I wasn’t particularly aware of it until recently, so I never used it to find books. Do people actually browse through it? Or is it used for determining recommendations?

The popularity lists are pretty important. Obviously, Amazon has an almost endless assortment of ways to promote books from within the store itself, but I think the popularity lists are one of the major factors. See the main Kindle store page? With all those links on the left to a variety of different genres? Those bring you to the popularity lists.

So they’re pretty prominent. Both for browsing and, yes, for recommendations–when Amazon sends out emails along the lines of “You might enjoy these other books in Epic Fantasy,” the links they include take you to the popularity list for that category of books.

Of course, the importance of any given category varies quite a bit by its overall popularity with readers. Romance > Romantic Suspense might be just a little more important than Basketry > Underwater Basketweaving. Ranking high on the popularity lists of small categories won’t make much difference. But in the well-trafficked ones, it’s pretty big.

It’s hard to know just how huge unless you are actually Amazon, but if I were to make conservative guesses based on my experiences, being on the first page in Epic Fantasy might lead directly to 20-60 sales per day based on your visibility there alone. (And maybe much more. This will vary a lot depending on your book’s overall appeal. I’m sure A Game of Thrones benefits from it just a little bit more than my dinky indie title did.) In Science Fiction > Adventure, I’d say it might be good for as many as 30-100 sales. For the biggest categories like Romance and Mystery & Thrillers, the visibility the popularity lists provide to the top books might be responsible for thousands of monthly sales by themselves.

Key word “might.” This is really tough to estimate. But in my experience, a lot of people see these lists, both when they’re browsing around Amazon and when they’re directed there by emails. Based on post-free results from hundreds of different authors, I’m positive the popularity lists were the main drivers for the big sales Select authors used to see after making their books free. Now that it’s so much harder to achieve high visibility on these lists via free alone, I’m afraid Select authors are in for some much leaner sales.

Yes, in a recent Kindleboards post, you mentioned that Amazon’s changes would effect those using KDP Select. Can you summarize what’s been going on and what the changes may mean for authors?

Amazon has made significant changes to their popularity list algorithms twice this year. Around March 19, they started using three lists at once. Around May 3, they condensed that to a single list. The new list works as I’ve detailed above.

If you’re in Select and have been doing book giveaways, you may have noticed that you started selling fewer copies after a free run starting March 19. You’ve probably done even worse since May 3. That’s because free copies used to be weighted equally with paid sales on the popularity lists–which also looked at most recent sales most heavily.

But now that free downloads only count for about 10% of a paid sale, and the lists look at the last 30 days of sales rather than the last week or so, it can be really hard to land high on the popularity lists unless you give away a colossal amount of books. (Though if you can make it there, you’ll stick for longer.) Without the visibility of the popularity lists to drive your sales, you probably won’t see the “post-free bump” we grew used to in the first few months of Select. Select can still be an effective program, but for the moment, it’s far less useful for generating sales than it once was.

For instance, back in February, I gave away 9000 copies of my fantasy novel The White Tree. That was enough to put me at #1 on the Epic Fantasy popularity list for several days. I sold a lot of books! In March, I gave away another 4700 copies. On a similar version of the list we’re currently seeing, that was only enough to boost me to #65. I didn’t sell nearly as many books!

For a more in-depth look at these changes, check out my series of posts here, here, and here.

In that last post, you talked about how the new changes may make it harder for authors with 99-cent ebooks to rank as well. What exactly are you seeing and what price points seem to be favored?

Yes. Price now seems to be a factor as well. Collecting data on this is really hard–in fact, I can’t even say with total certainty this theory is correct–but there’s a strong correlation between price and relative position on the popularity lists. In short, the higher your price, the better you’ll place relative to your overall sales.

The favored price point in this new system is “as much as you can get away with charging.” It looks like $0.99 books have been pretty well massacred. $2.99 books can still place well (particularly when they’re boosted by giveaways), but they’re at a noticeable disadvantage. Something like $5.99 – $12.99 looks to be the ideal range at the moment. Affordable enough for people to buy in droves (if the quality is there), but with a high enough price to hang with all the high-priced traditionally published books.

This is not a call to jack up your prices. If you raise your book to $7.99 and only sell 20% of what you were doing at $2.99, you’ll be worse off on the popularity lists. And remember, the popularity lists are just one way to generate sales (although it is a significant one). But since price appears to be directly relevant now, it’s something to be aware of when positioning your book.

Any thoughts on why Amazon might be making these changes? To push people into their ideal $2.99 – $9.99 pricing bracket?

I don’t know. Could be, but it’s not like Amazon made any announcements about this. I don’t think Amazon builds these algorithms with overly specific goals in mind. Like, nobody in Seattle woke up one morning and said, “And now I ruin John Locke’s life! Ah ha ha ha!” As far as I can see, all they care about is what will make them the most money now and continue to do so ten years from now.

Do you have any parting thoughts on what these changes might mean for authors who hope to do well in the second half of 2012 and beyond? It seems like some of the “tricks” indies have used to outperform mainstream books (99-cent price tags, KDP Select free days, etc.) might not work as well in the future. Will this force us all (Big 6, small press, and self-published authors) to sell and promote our books in the same way?

This is just one more step in the ongoing and absurdly fast-paced evolution of the ebook market. The algorithms could change again tomorrow or six months from now. Amazon makes changes all that time.

That said, in the meantime, Select isn’t the money-printing machine it once was. To sell many books, you’ll have to do more with it than “set book free, sit on couch, drink fruity drink.” You need to have a secondary strategy to make your book visible after your free run’s over, or use your free run to specifically generate visibility for your other books. So maybe the strategy is to make the first book in a series free on a regular basis, or taking out an ad to run the day after your book reverts to paid to try to cluster as many sales into one day and climb the bestseller lists, etc. Indies are still in the process of working this out.

If these changes stick around long-term, we might see a convergence of prices, tactics, etc. between indie and trad publishers. But I think that, for better or worse, we’ll see yet another change before the year is up. Maybe several of them. While the current changes don’t look good for Amazon’s indie crew, we still have the advantage of being able to adapt faster to them–and to whatever comes next.

Thanks for taking the time to answer these questions, Ed!

~

Edward’s bio and information on his books:

Born in the Pacific Northwest, Ed recently moved with his fiancee to Los Angeles, where they’ve since accumulated three small furry mammals. A sci-fi and fantasy author, his short stories have appeared in a couple dozen magazines online and in print. His epic fantasy novel The White Tree and the postapocalyptic thriller Breakers are both available through Amazon. A more complete list of his work is available here.

Note: if you’re reading this on Friday the 18th, Breakers is free at Amazon, so make sure to check it out!

 

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66 Responses to Updates to Amazon’s Book Ranking Algorithms: The Death of 99-Cent Ebooks? An End to KDP Select Perks?

  1. Joe Vasicek says:

    It seems like the only thing for it is to focus on writing a good book and not price it in the bargain bin. And promote it by writing another book.

    • Yeah, the strategy of “write good book, repeat” continues to be the only consistent one there is.

      There might still be room to sell at bargain prices, though. The popularity lists are just one driver of sales, and selling at $0.99 doesn’t guarantee you’ll never rank highly on them. But it’ll definitely be tougher to make it at that price for now.

    • Heru says:

      I have a quality book, great cover, marketed heavily on all social media, 3 SALES WTF

  2. Tara D. says:

    There is a lot here to parse. Thank you for explaining so much.

    I was never interested in doing KDP select and giving Amazon exclusivity so I admittedly resented that it was a way for people to seemingly game the system and get a ton of visibility so they’d later sell a bunch of copies just because they’d had a bunch of free downloads. I will be glad if that disappears because it was pure favoritism for those willing to play by Amazon’s rules and stick a middle finger up to readers on other platforms.

  3. C. says:

    Oh my. This makes KDP Select even less desirable, from my perspective. Except my partner did point out that even if it doesn’t effect immediate next-day sales (as it did for our debut book in December. It sold nonstop for two weeks after that) any title given away is still 150… 400… 743… more people who have it available to read, and some may.

    Other than that, I think a price increase might be a good thing to try out. I think we’ll do it with something slow-moving already.

  4. Joanna Penn says:

    This is brilliant – thanks Lindsay and Edward. I appreciate your research on behalf of us all!
    I think that reviews will continue to be important – so that’s something we can impact, regardless of price. I like the fact they are trying to get rid of the ‘gaming’ that seems to be going on, but am not happy about the price issue as it is one thing indies have a real advantage with.

    I think the next 6 months will see some fascinating changes. I heard Michael Tamblyn from Kobo speak at the London Book Fair and he was really excited at the way indie books were being sold in other countries where the exchange rate means indie books are favored. Kobo is one of the reasons I’m not going with KDP Select again. Ebooks are expanding into foreign markets so there is real potential for that going forward. India is a HUGE english speaking market on the verge of ebook crazy!

    Exciting times indies 🙂

    • Lindsay/Edward,

      This was truly a great post and I thank you both. I would also add that I second Joanna’s view on the importance of reviews. In fact, I think I pretty much owe the bulk of my sales to reviews.

      It’s not that I wouldn’t like to get on the ‘popular’ lists, but I can’t seem to crack them, despite several months in the top tier of the best seller lists in both my categories (Technothriller & Men’s Adventure). I was at $2.99 most of that time, but have been selling well at $4.95 since 1 April, so I don’t think price is an issue.

      Maybe I’m looking in the wrong spot, but I’ve clicked on the ‘popular’ list til I’m blue in the face, and until I’m scrolling past books I know aren’t selling as well (at least if Amazon Sales Rank is to be believed). Nothing I’ve read in this, or any of several other excellent posts on the issue, has given me any clue as to why I seem to be consistently among the missing.

      Any thoughts or suggestions would be appreciated, either as a comment or email.

      Thanks,

      Bob

    • Lindsay says:

      Thanks for taking the time to comment and plug the interview, Joanna!

      I love your positive attitude for the future of indie publishing. I hear Kobo is also supposed to a self-publishing portal (like PubIt and KDP) for their site at some point this year, so that could really make it a more interesting market for indies.

  5. Margaret Y. says:

    Excellent post! Thank you Lindsay and Edward for all the information. I learned a lot.

  6. Tammy says:

    Fantastic information. Thanks to you both so much taking the time to synthesize all of this changing information re: Amazon and laying things out so clearly. It helps me, as an indie author, feel better knowing that the game is constantly shifting and always opening new opportunities to do well. Cheers!

  7. Jeff Faria says:

    I’ve been tracking this as well. It’s important to indie authors, to say the least. Too bad Amazon can’t just come out and SAY what it wants, but it’s like the stock market – people would just try to game it if they knew. (Thanks for this post, I think you advanced the bar of knowledge a bit.)

  8. Great info. I had a significant drop in sales in mid-April after my second KDP Select run, and this blog illustrates why. As already mentioned, it’s best to promote as much as possible while writing that next book. That’s what I’m doing now!

  9. AE Marling says:

    I see the value in removing the gaming-the-system methods, but otherwise this looks like a punch in the gut to Indie authors. The greatest advantage we had was being able to price books at the $2.99 and below range, and now Amazon is penalizing us from doing that by weighting the lists toward more expensive titles. Or am I analyzing this wrong?

    • c. says:

      I suppose that depends on one’s perspective. I’d love if more indies would charge more for their work. It’s a book, with months or years put into it. I just don’t understand why so many people want to charge so little for their final product, which by in large devaluing not just their own work, but when too many people do it, the entire indie community. But that’s just me. Since amazon isn’t unranking .99 or free books entirely, I’m not too worried about it.

      Why do most people download free books anyway? Because they’re free. Lots of free downloaders don’t even check the book out before taking it. Why do people download .99 books? Because it could be interesting and they have a buck. But neither of these options have much to do with the quality of the writing. I don’t put much stock in cheap books with lots of sales unless I seesomething else about the book that impresses me.

    • Lindsay says:

      I think it’s designed to get more of us to price our ebooks at $2.99+. IMO that’s perfectly reasonable for a novel, though short stories and novellas (which may be fairly priced at .99 or 1.99) might get penalized here too. That’d be a shame.

      • Mana says:

        Indy authors being priced out of the 2.99 and less market will hurt some of them. Unfortunately, unless I *know* I like the author and *know* I want to read the book, I won’t pay for the next one if it is more than 2.99.

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  11. None of my titles are in Select. I didn’t want the limitation on distribution that would entail.

    But I’m planning an experiment for this summer. I’ve outlined a novelette to write, and when it’s complete I’ll put a sample chapter from my novel in the back and try it on Select for 90 days. Once the 90 days are finished, I’ll pull it out of Select and release it at B&N and Smashwords.

    I have no illusions about getting on either the popularity or the bestseller list. I’m sure I won’t. What I’m curious about: will the story show in the “also bought” or “also looked at” windows? I’m so new, that my books do not right now. I’d like to change that.

    • One of the benefits of Select that hasn’t gone away is that if you give away any significant amount of copies (a couple hundred, say), you’ll wind up with some alsobots a day or three later.

      How helpful these will be varies wildly, but I think getting those in place is part of the explanation for why some authors have seen long-term benefits from going free–their book sold 1/week before giving away some copies on Amazon, but afterwards, it sold 1/day, for instance. These gains are pretty modest, but I know that when I went from selling a few copies per book per month to a few copies per book per day, I was thrilled. They can really start to add up.

  12. AE Marling says:

    One of my problems with KDP is that it lists a $0 next to your book, which might put the idea in the reader’s mind that they should be getting this book for free, rather than paying (as they would with Amazon Prime).

    I wonder if I do my book a disservice listing it at $2.99, in the sense that readers will instantly know it’s Indie. Perhaps we subtly demean or books by charging less than published books do. That said, I have no intention of increasing prices all the way up to $10 for an eBook, as that just strikes me as uncalled for.

    • Mana says:

      To me independent authors/artists/musicians are the people to buy from. If the 2.99 marks you as indie then you are at an advantage for me. As I mentioned above, pricing yourself 2.99 and lower actually entices me more. I tool around the free bin at minimum once a month and find my authors that way. I don’t think I’ve bought more than one book at a price more than $6. And that book I regret whole heartily.

      If I don’t *know* your work, I rarely buy your work unless I’ve had a taste of it and liked it.

      Just my 2 cents…

      • C. says:

        I’m less enticed by a $2.99 price. I go cover first, then description, then the sample. 9 times out of 10 the sample kills it for me and I don’t buy anything. I find this true for a lot of traditionally published books as well as indie books.

        I think that’s what I’d like, is more levelness between traditionally published books and indie books. Trad. pub. books are NOT worth 2, 3, or 4x the cost of indie books most of the time. And Indie books don’t deserve to be under priced. A book is a book, and indies have the benefit of having complete control over what goes on their shelf, an advantage trad. pub. authors don’t and never will have. Indie authors also have the benefit of being able to have full use of their creative abilities, where as trad. publishers are accepting fewer and fewer unique works. Those are advantages I wish the Indie community could flex their muscles in more than just ‘buy this, it’s cheaper.’

  13. Julie Isaac says:

    Thanks Lindsay and Edward!!! I’ve been hearing rumblings about this for a couple of months, so it’s fabulous to have it addressed directly… well, as directly as possible. Everything in the ebook world changes practically at the speed of light: the technology, the strategies, the algorithms, the price points. It keeps everyone on their toes! Speaking of which, I’m off to read your other posts about this to give my toes a workout.

    Thanks, Julie

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  16. Khaalidah says:

    Thanks Lindsay and Ed.
    I joined KDP select over the weekend just to see what will happen over the next three months. I don’t have high hopes here, but I am curious to see the outcome.
    I know that a second or third book helps a ton, but since I so far have only one novel published, I’ve go to go with what I have. Also, of particular concern to me is this: Once this second novel is complete and publishable (I am working on this) it is still going to stand as a single novel anyway. Why? I wrote my novel AUW more than 15 years ago. I was in such a different place. This new book is an entirely different genre and has a hugely different feel! It’s not the ideal follow up to my current published book. So there I will be again.
    Nevertheless, this post was immensely informative and I’ll definitely be back to give it another read.

  17. Thanks, Lindsay and Edward, for the analysis. Looks like every three weeks is an entirely new era!

    I am fascinated how some people think “value” is solely determined by the product creator (“I spent a full year writing this book so I want a year’s salary for it.”) Or how indie writers are “owed” something by Amazon. I am gratefuil for Amazon every single day, and I don;t expect it to last, but I certainly won;t blame Amazon when it all goes down the toilet.

    I will say, “Wow, that was cool, and I am glad I was there when the crazy happened.” Because this will not last. That early Select period may well have been the very peak of the Golden Age of Indies. And to be resentful that some writers “gamed” the system and took some money away from the Big Six–that staggers me. Big Six has gamed the system for a century.

    The more nickels in writer’s pockets, from whatever means, the better. Thanks, Amazon.

  18. Linda Hawley says:

    Excellent post that answered some pressing questions I had. Nice job!
    Linda Hawley
    Author of The Prophecies

  19. Mary says:

    Since I bought a Nook, I never favored going with KDP Select. I want to be able to read my own book. That, and I feared authors turning the big six into a big one. We need options and choices.

    Free and 99 cents can still play into a marketing strategy. Maybe it doesn’t get us placed highly, but if we write a good product, word of mouth still plays a crucial role.

    We can still use Twitter to target our niches. We can still use social media & real life venues to win over readers.

    This article is fascinating though. A lot of information I never would have figured out on my own. Thanks, Ed and Lindsay.

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  24. Debbie says:

    I am so glad they changed the rankings. The free books were killing the market.

  25. Owen Banner says:

    Big help in understanding the way KDP is setting up it’s systems for at least the next few months. I hope to capitalize on your info this summer when I release my own thriller, Hindsight. I’ll be looking into that “ad campaign the day after” strategy.

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  28. Thanks Edward and Lindsay for this post. We placed our first novel The Cordello Quest into KDP Select a couple of months back. We increased our audience through the free days, but saw no post-sales surge, which was puzzling at the time!

    The idea of experimenting with the Categories is something we hadn’t considered. Guess I’d better start doing some research lol. Thanks for the tip. 🙂

    This has answered some questions for me. But of course, as is the nature of this industry, there will be plenty more to answer during the years ahead.

    I’ll be following your blog from now on, Lindsay! (Came here via a link tweeted by Jonathan Gunson.)

  29. Barry Napier says:

    Every single thing in this post is relevant to the past month or so of my writing. I dropped one short story collection to 0.99, as I thought it was a great introductory sort of book for people new to me. Alternatively, I raised another collection to $2.99 just to test the price points. So far, no big difference between the two.

    I also released the second book in my series on Tuesday and made Book 1 free for 3 days. So far, the download numbers aren’t staggering (about 750) and the reflection of those downloads to purchases for Book 2 have been quite poor.

    Short and sweet of it is this…this is my 2nd experiment with FREE and both have been lackluster at best. SO I am pretty sure I am done with FREE. Also, I am seriously considering the $3.49 price point for all novels in the coming weeks.

    So much is always changing with e-book pricing and trends that I really do think that, aside from writing a great book, a lot of it comes down to who you know and a great deal of luck.

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  32. Excellent interview!

    Many author bloggers seem to be lamenting the reality of changing algorithms.

    Selling strategies that proved effective in the past no longer apply and now we have a glimpse into part of the reason why thanks to articles like this. Or, I guess I should say, *this* article.

    This is the first thing I’ve seen that actually tries to pin down these factors beyond gut feeling and pure guesswork.

    It seems to ad hoc validate the sales results I’ve experienced.

    Thanks for sharing your insights!

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  36. Great Article. Very informative. If you’re going to be in this business then you need to understand how it works.

    Truly,
    Michelle Hughes

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