It seems pretty likely that these businesses, selling very different products bought with different bargaining positions to different people with different shipping costs, have different margin potential.

This still doesn’t really give an accurate picture, though. Amazon is in fact organized not just in these segments, but in dozens and dozens of separate teams, each with their own internal P&L and a high degree of autonomy. So, say, shoes in Germany, electronics in France or makeup in the USA are all different teams. Each of these businesses, incidentally, sets its own prices. Meanwhile, all of these businesses are at different stages of maturity. Some are relatively old, and well established, and growing slower, and are profitable. Others are new startups building their business and losing money as they do so, like any other new business. Some are very profitable, and some sell at cost or at as loss-leaders to drive traffic and loyalty to the site. Books are a good example. There’s a widespread perception that Amazon sells books at a loss, but the average sales price actually seems to be very close to physical retailers - it discounts some books, but not all, and despite all the argument in the Agency lawsuits, quite how many and how much is (deliberately) as clear as mud.

Amazon is a bundle.

The clearest expression of this is Prime, in which (amongst other things) entertainment content is included at a high fixed cost to Amazon (buying the rights) but no marginal cost beyond bandwidth, as a way to enhance the appeal of being a Prime ‘member'. Prime membership in turn draws people to switch more and more of their online and offline spending to Amazon. Trying to look at the profitability of the video alone misses the point.

And then there are the third party sales. Just as AWS is a platform both for Amazon's own internal technologies and for thousands of startups, so too the logistics and commerce infrastructure themselves are a platform for lots and lots of different Amazon businesses, and also for lots of other companies selling physical products through Amazon’s site. Third party sales of products through Amazon’s own platform are now 40% of unit sales, and the fees charged to these vendors are now 20% of Amazon’s revenue.