It's an open question if Amazon will ever be able to raise prices and reap those promised profits without losing marketshare to the many players that would love to take them down.
Right now I view Amazon as a very profitable web hosting company and a retail non-profit.
Google and Microsoft, for comparison, were both much faster to get to monopoly-level marketshare. Amazon, at 24 years old, still isn't there.
Would you rather be Pullitzer (advertising magnate) or Vanderbilt (transportation)? I'll take the latter every time from a pure $$$ standpoint. Bezos is actually trying to be both.
Of course that analysis ignores that the retail business is what allows Amazon to have an advertising business. But the GP is largely accurate. Amazon is most well known for their retail but it's not really what makes them the money. AWS is their cash cow and advertising is becoming their second.
I stopped buying shit from Amazon and haven't had a problem finding things elsewhere. Yeah, I pay 1% more... big deal. Fuck those guys.
That's mischaracterizing the situation. They're not unprofitable because they're charging less than they could, they're unprofitable because they pour their profits immediately back into growing other business avenues. If Amazon spent a quarter or two slowing/halting the development of new business ventures they'd immediately be profitable. If they spent a year doing that and also trimming prior unsuccessful ventures they'd be quite profitable.