It sounds like there's a lot of confusion here between ROI and margins. ROI is not margin. And there are different types of margin. "Net margin" is the profit

It sounds like there's a lot of confusion here between ROI and margins. ROI is not margin. And there are different types of margin. "Net margin" is the profit from revenue net of not only the cost of merchandise, but all the overhead costs: the cashier, the retail leases, the buyer, accounting staff, management, etc. "Gross margin" is (roughly) the amount made for every additional sale. If you buy apples for $0.80 and sell them for $1, your gross margin is 25%. This gross margin must pay for all the overhead expenses mentioned above. Based on the total number of apples you sell, you may figure you have to cover $0.18 of overhead per apple sold, leaving you with a net margin of 2%. But the important thing to understand is that you aren't actually paying $0.18 more in overhead per apple for every extra apple sold: you're making $0.20 and paying nothing in extra overhead. So increasing volume of sales can substantially improve net margins, if it doesn't take extra overhead. "Return on investment" (ROI) relates to how much capital is required to generate net margins. You absolutely can run a low net margin business that has high ROI. How? You turn inventory like crazy, or better yet, don't have inventory (think drop-shippers). Or you take a long time to pay suppliers, reducing the amount of capital required by the business, and get paid up front by customers. Amazon's market model for third-party sellers ("FBA")would be high ROI even if it were low margin because they do not own the inventory, get paid up front by customers, and then sit on the cash for 90 days before paying the FBA vendor. Hell, I suspect the total capital required for that business is negative. No wonder they're so focused on expanding it! You don't need high margins if your business model throws cash at you. Just keep net margins above zero and you'll be swimming in cash. (Hint for startups: find a business model like that. You won't need VC and you'll get vastly personally richer than one with high margins, but which requires massive capital, and therefore dilutes you as the founder to a pittance.) It is also possible to have a business with high margins but low ROI, if it is extremely capital intensive relative to profits, such as a big manufacturing plant in an industry where it takes them a long time to get paid. I'm not sure what Amazon's plan is. But the fact that the grocery business has low net margins is not a reason not to get into it. It all depends on the economics, which is more complicated than just "low margin."