What Do Amazon Sales Rankings Really Mean?

I was answering a question about Amazon rankings on a listserv. Since I looked up some information, I thought I'd share it here as well. Authors can get wrapped up in their sales rankings, but how much does your Amazon sales ranking really mean?

Some books will have very low rankings but may do well in school and library sales. There may also be different rankings for the paperback and e-book versions. For example, here's what Amazon tells me:
Copies sold are for the last year to date, Feb. 21, 2012-Mar. 3, 2013, per BookScan, which is available to authors through their Author Central page. "BookScan estimates they report 75% of all retail print book sales." – this includes chain and some independent bookstores, NOT just Amazon, but does not seem to include libraries. Amazon sales rankings are current, which pays most attention to recent sales, I believe. Yes, it's comparing apples to oranges. That's my point

Milton Hershey: Young Chocolatier sold 4491 copies in the previous year and is currently ranked #5,397,877 in Books, #49,604 in Kindle Store

Jesse Owens: Young Record Breaker sold 3980 copies, ranking #2,146,498 in Books (no Kindle)

The Well of Sacrifice sold 586 copies, ranking #239,389 in Books,  #320,872 in Kindle Store

What's really interesting is that Milton Hershey has the most copies sold according to  BookScan, but the worst Amazon sales ranking. That suggests it sells better through non-Amazon  channels. The Well of Sacrifice, on the other hand, apparently sells pretty well through Amazon.

FYI, my royalty statements usually show sales of around 2000 copies per year of The Well of Sacrifice, compared to the 586 showing up through BookScan, although the dates aren't aligned to the calendar year there, and I haven't yet gotten my statement for the last half of 2012. The difference may be that this book sells well to schools and libraries.

The main take away is, don't take your sales rankings too seriously!