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While Amazon did lose millions of dollars in their early years, they made a "profit" on each item sold. Their early problems wer they were not selling enough items to cover the fixed expenses. At no time did Amazon sell goods below what it cost them except to clear old stock from the shelves.
Their business model is to make a profit on each item. For something like this they may shave their profit toward zero at the start to get people to buy it and then to come back for more books. There is also a huge market for selling maintenance contracts and insurance for devices.
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