When a customer does a search in Amazon, the order in which things are returned are based on their popularity and their relevance to the search terms. You can't directly control your popularity, but you can put enough metadata into Amazon's system so that customers can find you. If a customer searches for "cozy mystery divorced detective with a limp profiles serial killers at beachside resorts during holidays leaked nude Metallica", and your book fits the bill, you want to let the search engine find you.
There are people that get paid a lot to know more about this than me, but here's what I know. The searches look for things in the following fields: author, title, subtitle, description, categories, keywords. It weighs relevance with the popularity and rating of the title. Amazon keeps it very secret what importance each of these have or what the exact formulas are.
From the KDP submission screen, you get two categories, which you pick from a drill down, and seven keywords, which are freeform. Keywords can also be categories, kinda. From a combination of these, your book can be placed in browseable/rankable categories. These categories are outlined here: https://kdp.amazon.com/help?topicId=A200PDGPEIQX41
Note that the browseable/rankable categories differ from the categories in the KDP screen. You could put your title under "Mysteries>Cozy" in KDP and pick a keyword "island" and you will show up in the category "Mystery, Thriller & Suspense Settings/Islands". Some on the link above don't actually exist when browsing in Amazon - I couldn't find Erotica>Horror, but that may be an exception.
These are different from what comes up in an actual search. At the bottom of a title's product details, there is the Amazon Best Seller Rank. Your title seems to be shown to rank in two categories, regardless of the number of categories your book is in. You don't get to pick which two categories are shown, but I'm assuming the title will still show up when browsing by category even if they aren't on your product page.
I don't have numbers, but I'm guessing most customers look for books through the search field at the top of every page. To browse by category, one would have to click on the left sidebar through a bunch of confusing screens to get to a particular subgenre. One can also click on the link within a particular book's product page for the bestseller's list. Any of these options are cumbersome, and I have trouble getting to a bestseller list when I'm trying. Most folks will just search.
So let's use the best selling book that I will admit to writing - Victim City Stories Issue 1. As of this writing, it's number 11 in Mystery, Thriller, Suspense>Crime Fiction>Vigilante Justice>Free. Out of a field of 12. Hooray for me.
If one looks at the bestsellers in that category from the bestsellers screen, under the free Top 100 for Vigilante Justice, it appears on the first page at number 11. If you browse by the category Vigilante Justice and sort by price low to high (so free are first) it shows up way lower, on page 10 of the results. If you just do a search in the Kindle Store for "Vigilante Justice" and sort low to high, I'm on page 2. If you then click the sidebar for the category Vigilante Justice, I'm the fifth item on the first page. So if you're looking for free Vigilante Justice ebooks, mine will rank very differently depending on how you look, even with the same price point, popularity, rank, and keywords.
Your rank will influence where you are in search results, but you can also use it to advertise, though once you're in KDP, you realize how worthless these bragging rights really are. I've had a Top Ten Amazon Bestseller than has made me less than $3.
Additionally, use your keywords to further narrow down what your sub-genre is, even if they're not in official categories. Doing a search for Masked Hero in the Kindle Store, Victim City Stories is the 3rd return, and the first that's not a comic. I've beat out Batman novelizations, Zorro, everybody. Hooray for me. If everybody wanted "Masked Hero" books, I'd be the first they'd see. If I just used the category Thriller or Mystery, you'd die of old age before you came across this title.
It's the difference between being a small fish in a big pond, or a big fish in a small pond. It hasn't worked as well for me, but other indie writers have found they do better the more niche a genre they write in - though here we're talking about how niche a genre you classify yourself in keywords. I haven't found a ton of tips on metadata online except to be honest and be narrow. Also, if you pick a narrow category, the title will show up in the parent categories. So Mystery>Cozy will also include Mystery.
Be wary of anyone offering paid advice for metadata - it looks shady as hell. It probably works, but shady. James Patterson seems to be a big name. Let's look him up in Amazon, and sort by publication date so we can find the latest book he put his name on. Note that after you sort through all the preorders, Patterson himself is only like every fifth item. Some of the noise here is books about him, or a book by Bob Patterson and James Nobody, but a lot of these are books that literally have "James Patterson" as a keyword. This is cheap, dishonest, against KDP policy, and probably works. Don't do it. If James Patterson gives you a review that says "This book is as good as the books that I, James Patterson, write", you can put that in your review section.
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