I use Calibre similar to the OP. I buy pretty much all books at Amazon, although I do have a few I had to convert. But I send those via sendtokindle from the calibre folder. Easier for me as I can't figure out how else to do it from calibre. My calibre skill doesn't go much further than having figured out how to backup my purchases. I do not use those files though to put on my kindles. I only use the regular ones direct from amazon. I too use collections extensively. I think I have like 47 or so.
. There actually is no issue if the kindle breaks as someone pointed out.
Unless of course you have all calibre files on it and not amazon purchased books. But the OP did say they buy amazon books. Collections are all backed up in the cloud, as are the books of course. Nothing to do other than dowloading the books back on device as needed.
But there are a lot more uses for calibre than I have ever figured out what to do. And it is of course very useful for those that buy from different stores and do device shifting.
Reminds me I haven't backed up my purchases in a while. I keep pushing it off as its not something I like doing. I always have to figure out again how to work the program and I am not a fiddler. Just want to read. But I also don't want to lose my books in the unlikely event something happens to my amazon account.