[gearhart]

Amazon has an estimated 7~8% operating profit margin on its retail business [1] which is circa $6bn (on ~80bn revenue) - you could imagine an argument that suggested that competing with them is only possible given a consumer mind-share that's only available if you're practically the single destination for consumers. There are niches in which other retailers can flourish but that, if you want to gain that sort of wallet share, you need consumers to identify you as a place that anything can be bought at a price that makes it not worth shopping around, and that you can't grow into that role, because at any smaller scale, Amazon can (and has shown that it will) outcompete anyone with those ambitions. It's risky, and nobody would even consider it if capital wasn't extremely available at the moment, but if you genuinely believe that they could become a viable Amazon competitor in the retail space, then burning a few hundred million acquiring customers and making a name for yourself in the process doesn't seem so irresponsible.

[1] http://seekingalpha.com/article/3017856-amazons-profitable-r...