Although Amazon started out as an online bookseller, its vision was much broader and indeed, it is now selling everything from A to Z. Bezos wanted Amazon to be a massive destination for customers to buy everything from books to music, from home electronics to shoes, and more recently, diapers and cat litter. Amazon may have started by competing head-to-head with Barnes and Noble, but more recently, it's positioning itself to take on Apple with its Fire devices, Netflix with streaming video and Walmart with grocery items.
This bold vision hasn't been lost on investors, who have long been willing to pay a premium for Amazon stock. Investors have been willing to reward Amazon because, even as it approaches $100 billion in revenues, it hasn't had a year in the past decade where it didn't grow revenues more than 20 percent year over year.
But while Amazon perennially ranks in the top 10 U.S. and global lists of revenue among competitors, its cutthroat pricing ensures it made neither of these annual lists in terms of margins. Amazon investors have been willing to give Amazon the benefit of the doubt (or the benefit of time) with an expectation that as Amazon expands, it will resolve the margins piece.