1) When profit margins increase efficiencies decline. While their profit margins were low, you can imagine they spent a lot of time optimizing processes to rema

1) When profit margins increase efficiencies decline. While their profit margins were low, you can imagine they spent a lot of time optimizing processes to remain solvent. This is an ongoing process, and when profit margins go up these kinds of processes are often neglected. 2) This is true, but where Amazon excels in market efficiency for the general case, they lack in supporting niches; especially high priced niches. For instance, I just purchased a $2600 (+$30 2-day shipping) lens from B&H photo, despite the fact that I have a Prime account, and the price on Amazon was the same. This is because, while I still trust Amazon for smaller purchases, I no longer trust them for expensive niche products like camera gear or computers, since their supply chain is out of control (Chinese knock-offs, etc.). 3) Sure they’ve made a few billion dollars in profit, but their opex is enormous. Compare this to Apple, who’s cash and equivalence is enough to run without sales for a decade. Given a downturn in the economy and a pullback in consumer spending (not to mention a drop in AWS revenue), Amazon could get into financial trouble pretty quickly.