You make a lot of claims in this thread about Amazon's e-commerce profitability, but I don't think you understand their e-commerce business at all. Physical ecommerce was massively profitable and paid for all the losses on the digital and device side along with part of the capital leases needed to build data centers for AWS for 15 years.
Their filings don't suggest that. If you have specific examples I'd certainly be interested to hear them or see a link. They were doing physical only commerce for years before anything digital and it wasn't profitable. Now that's understandable, but the claim that physical e-commerce was massively profitable seems very overstated.
When you say "digital" do you mean like Prime Video? Or kindle books? Or something else? When you say devices do you mean kindles? I'm struggling to believe that the kindle book line is run at a loss. I'd understand specific titles might run at a loss and I'd understand if the devices run at a loss but kindle books overall? Prime Video "losses" are sort of my point - they can almost be thought of as marketing expense.
As for the capital leases - those are accounted for at the corporate level and mostly run through the cashflow statement. The numbers they quote as operating income for the non aws business don't include those capital lease costs. ie on page 17 of their most recent Q (https://www.sec.gov/ix?doc=/Archives/edgar/data/1018724/0001...) those reported operating earnings don't include the capital leases. If you look on page 3 of that filing (Principal repayment of finance leases) you'll see the (big) number there.
All that said - you still could be right. But if you are it's almost like they are going out of their way to deliberately make their numbers look bad on the non-AWS side. There is a big difference between not caring and actively making it look bad.
When do you think their physical books category was profitable?
Because their earnings filings from 2000-2007 certainly suggest that they were making a boatload of money on books. Their Media segment was making a ton of money while their EGM segment (electronics and general merchandise) was losing a ton of money. And then EGM became profitable and they combined the segments together into a single physical retail segment that included their new focus on apparel and fashion.
Amazon started with books, made books profitable and then used that profit to move into the next category (VHS/CD/DVD) and then the next category, etc.
Prime video and amazon studios have been spending over 4 billion a year since 2014 (no idea what the current spend is). The entire point of those billions was to keep people as prime subscribers and keep them spending on physical retail. This strategy only makes sense if physical retail is profitable. It's an LTV play.
Devices were run at a gross margin loss and even worse capitalized loss if you include the capitalized R&D expenses. "We want to make money when you use our devices" - Bezos. The devices themselves were sold at a loss for many, many years.
Amazon used the same strategy of capital leases for funding warehouses and funding AWS data centers. They only started reporting on the capital leases in the last 5-10 years (can't remember the year).
I've been following Amazon's shareholder letters and releases for years. Physical retail has been massively profitable.
