It seems like Amazon is in a position where they could turn a huge profit, they're just choosing to reinvest instead. If they just raised prices by something tiny like 1%, wouldn't their profits become instantly massive?
If consumers were insensitive to that hike, yes. Problem is they aren't, which is why Amazon has to keep reinvesting and operating on that razor thin margin. That strategy is as bad for individual companies as it is for the macroeconomy (Asian tiger bubble comes to mind).
