[gizmo686]

Amazon benefits from being the winner in its winner-take-all market. It also benefits from having competition in the upstream markets.

For example, if Dominos were the only pizza provider, they would be able to offer whatever terms they wanted. Amazon only leverage would be mutually assured destruction [0] of not offering any pizza. If there is a diverse markets of pizza providers, Amazon can dictate the terms and drop any provider who does not play ball.

In fact, many companies make a point of having multiple upstream providers to limit the leverage any one provider has over them.

[0] Not quite an existential threat to either, but painful for both.