[unclebucknasty]

It's an operational cost, not COGS. And, sure it's a standalone line item as much as any other.

Not sure I understand the distinction you're attempting to make. It's a function of their model that can affect their competitiveness and may well argue for (or against) closures.

[sokoloff]

I used "cost of sales" when I meant "cost of revenue". However, I suspect the revenue from Prime counts as top-line and the shipping cost losses are absorbed as a cost on the COGS line, so the net effect is probably reflected as revenue and COGS. If I get some time, I'll poke through their last 10-Q/10-K to see if I can confirm that treatment.

The point I was trying to make is that Prime (and any associated losses) is part of Amazon's go-to-market strategy, just as opening retail stores is part of HD, WMT, and BBY's strategy. Saying that Amazon is "losing money on Prime" but that the others aren't "losing money on stores" seems a double-standard to me.

[unclebucknasty]

I guess you can parse it any way, but I consider those to be very different. A more valid comparison is between the retail stores and Amazon's distribution network, fulfillment centers, warehouses, etc. These things all fall under capital expenditures (CapEx) and represent hard costs that must be paid/financed.

Like retail stores, they are also part of the required infrastructure to fulfill customer orders.

Prime, OTOH is more a marketing expense. I would compare it to coupons, store savings cards, etc.

So, the double-standard doesn't exist in my view; unless you were to count retail store costs without counting Amazon fulfillment costs.