Is There A Problem At #Amazon

Today I hand the blog reins over to my day job colleague Simone.  For months she's been analyzing Amazon's ranking system and wonders about the health of the system.

Thank you to Gabrielle for letting me stop by today and thank you to the indie authors who have so wonderfully shared their numbers with me.

I have been an Amazon shopper for many years; buying books as long as I can remember and more recently expanding my music catalog. I am such an Amazon fan that I’ve actually gotten rid of Itunes.  Over the past year I have been communicating with independent authors, who have been selling books through Amazon, and we frequently discuss the “Amazon ranking/ratings algorithm,” which of course is a proprietary secret.  Some who follow Amazon's rankings closely believe that they have cracked the algorithm, but say it does change from time to time.  I would need to see equations or even just an equation to believe the algorithm has been cracked, but can this algorithm alone be blamed for the recent anomalies in the rankings on the Amazon US website?  The anomalies in the Amazon US rankings have been attributed to many things, such as KDP which came online at the end of 2011, though I believe that the anomalies that have been occurring with the rankings at the Amazon US website are really just the tip of the iceberg, in terms of Amazon’s website.  These rankings seem to be based on sales and on how long the book has been on the market, but recently (over the past 5 months, actually since KDP) some authors have seen sales drop from the thousands per day to the tens per day, and some even say their books have disappeared from the Amazon website. Authors are wracking their brains, desperately trying to figure out what could have gone wrong.  Asking themselves many questions, such as, “Is the ranking system based on the number of likes or tags, and why are my sales faltering?” 

     Studying the situation analytically, it seems that while there may be a problem with the algorithm, there may be a much larger problem with Amazon’s website, in general. Imagine you are sitting at home and see a book that you would like to purchase, and you are a frequent shopper so you hit the click to buy button and the book is sent to your Kindle. The one button click that you just made causes many events to occur behind the scenes, all of which are handled by computers programed by Amazon workers to do certain things. For instance, I click the button to buy a book, and not only are my credit card automatically charged and my purchase recorded for Amazon’s files, but the author and/or publishing house’s account must be credited for the specific book purchased. Then once that information is in the system the algorithm can be updated with the latest purchasing information, but what happens if something goes wrong on Amazon’s side at the beginning of this chain of events? I click to purchase the book I want and it gets quickly delivered to my Kindle and I am overjoyed at the ease of shopping, but what if when I clicked, the sale didn’t register properly on Amazon’s end. They gave me the book, but that information didn’t get to the author’s account so the sale wasn’t counted. The author just lost money and it didn’t help the author’s ranking.  Even worse though from Amazon’s perspective, what if when I clicked to make the purchase for one book Amazon’s software made a mistake and credited the author for ten books or even one hundred books? If this information hits the algorithm, now an author who sold ten books in a day suddenly believes they have sold hundreds and they are soaring in the rankings. 

I have the following questions for Amazon:

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Are the authors who sell through Amazon who have seen swings in sales and ranking approaching Amazon regarding these anomalies?

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If there is a problem with the website and the software, is Amazon keeping mum about the problems because of the ramifications of the glitches in the software? For instance, is it cheaper for a billion dollar company to pay the author, who thinks they’ve sold a thousand books at 99 cents, the money they believe they are owed or risk damage to their brand name by admitting they have a glitch in their system, which would hurt buyer/seller confidence? If we do the math, an independent author who sells a thousand books a month at 99 cents makes 35 cents on each sale, which is approximately $350 for the month, which is a pittance compared to what Amazon pulls in each month. Even if 10,000 authors where over-credited for a thousand, 99 cent books for a few months that only amounts to $3.5 million a month.  Compared to the damage to Amazon’s reputation and the financial loss of a class-action lawsuit, paying a few people a tiny fraction of what the company earns a month seems like a no-brainer.

There are a few things that still need to be investigated:

First and foremost, am I onto something here? I freely admit that my evidence is mostly anecdotal. My evidence comes from the following sources: authors on different web groups discussing how their sales have fallen drastically in the past few months, author’s books disappearing from the Amazon US website, erratic changes in the rankings within the last few weeks, comparisons of sales of the same books on Amazon US and Amazon UK that show no real decrease in sales for the UK. (Amazon UK is a separate website with separate databases and separate algorithms.)

Bizarre fluctuations are being noted across the web.  If there is actually a problem akin to the one I propose above, then this leads me to ask the following questions:

·         Are author’s rankings changing drastically because Amazon is artificially trying to rectify the problems of the past few months?

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At this point have the problems actually been fixed, and do these rankings mean anything anymore?

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If this problem is not fixed at this point, what is Amazon going to do to solve the problem?

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Is the problem more widespread than the book market? If authors are getting paid too much or too little, then maybe other venders are too.

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Does Amazon actually owe some authors money, and how can they guarantee that everyone has been paid what they are owed?

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Does Amazon realize that they have caused many authors mental anguish and financial loss, and not just because of book sales or the lack thereof, but advertising money improperly spent due to the ranking anomalies?

For the mega-company that is Amazon, if these problems are occurring and have been going on for months, then the ramifications could be devastating. This is just one take on the situation, but there seems to be a problem. One answer is clear: there needs to be more transparency in the business end of the indie publishing industry.

Thank you, Simone, for stopping by. I've never been one to check my rankings much, so I haven't noticed a drastic rise or fall in them.  But for the many authors I've been reading about for months who do, some answers would help immensely.