Under limited circumstances, depending heavily on what is causing the loss, sometimes this can be effective for very few companies. Of course, many people unrealistically believe that their circumstances apply, that the cause of the loss is irrelevant, and that it will be effective for them. Most are wrong.

Losing money per transaction is dangerous. Making money per transaction but plowing the profits into expansion is less dangerous. The latter is what Amazon did. The former is what too many companies are doing, not seeing the difference.