I separate by personal tags that make sense to me
Free Novels: All the Amazon books I got for free that may/may not be good
Pro Novels: Professional novels that I either bought or am reviewing an ARC of
LGBT Novels: Books in that genre that don't have more than one book per author on my Kindle
LGBT Authors: There are probably 10 collections with different author names for this type, where I have more than one LGBT book for an author
Fanfiction: Stories that I have recently sent to my Kindle that I may/may not keep
Fanfiction by Genre: I have about 10 collections with different fanfiction genres that I am keeping permanently on my Kindle
Comic Meta: Books that explore meta in comic books (the actual comics I have I only store on my Kindle Fire HD so I can read them in color)
Nonfiction: Books of that genre
I might have a few more collections, but that's what I remember right now.