[snowwrestler]

It’s speculative to say that “Amazon can start turning on major retail profits at any time it chooses.” Amazon has not done it yet, so there’s really no proof that it would be so easy, or even possible.

I know the party line, which is that Amazon chooses not to take retail profits because they would rather invest in growth.

But invert that statement to understand it a different way: it implies that when they choose to take retail profits, their growth will slow. (If they could take profits and keep growing they would already be doing that.) How will investors like an Amazon that’s not growing anymore?

Personally I think that the way Amazon’s retail side runs today is the only way it knows how to run, and is how it will always run. The expectation of massive retail profits will always dangle out there in the future like a carrot for investors to chase.

[woeirua]

Just look at how much money Amazon is spending on Prime shipping. It's insane. They're never going to turn a profit, because as soon as they stop subsidizing shipping customers will go elsewhere. There is no reason to expect Amazon's retail arm to ever be more profitable than Walmart is.

[dx034]

Isn't the idea behind prime shipping that with enough volume, any product in demand should already be stored close to the customer? Their expanding fleet of aircrafts make me doubt that it works that well but who knows, maybe their air cargo as a percentage of all shipping is decreasing drastically.

In the end, online stores aren't that hard to build and local stores can become competitive if Amazon really decides to cash out. Amazon is growing so fast because they don't really turn a profit, not because they pushed everyone else out of the market.