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I think what they do is simply nudge up the prices and with the huge sales volume they have built, a pretty big bottom line begins to grow. Of course, raise prices and sales go down.

What Amazon is doing is buying market share by holding down prices. And believe me, Bezos has plenty of great advice--not that he needs it.

The stock is priced based on a metric which has not been shared with me.

I own the ETF "QQQ" (which is the NASDAQ 100) and QQQ has Amazon as a component.

As an aside, I think part of the reason Amazon is not making a profit is that it is using what would otherwise fall to the bottom line as expenses needed to fund growth.

I must admit, I have not examined Amazon carefully to figure precisely what they are doing.

What Amazon is doing is buying market share by holding down prices.

Yes and no. E-tailers' and discounters' market holds down prices; Amazon's size allows it to run on slimmer gross margins, which it does to buy market share and push marginal players out of the market entirely and some larger competitors out of certain segments of the market and reinvest in inventory and infrastructure (such as storage and delivery)... which in turn buys some more market share. The reason Amazon can continue to do this at a loss for so long is...

I must admit, I have not examined Amazon carefully to figure precisely what they are doing.

The reason Amazon can continue to do this at a loss for so long is... because the market / WS recognizes that it has another, hugely profitable, but much less known component — and that is the "Amazon cloud" known as Amazon Web Services / AWS which is the excess of virtualized storage capacity it "rents" to e-stores and other companies, for Software/Storage-as-a-Service (SaaS), Platform-as-a-Service (PaaS) or Infrastructure-as-a-Service (IaaS). It's the largest cloud service, ahead of Microsoft's cloud service known as Azure, Google's Compute Engine and others like Salesforce and Rackspace etc.

AWS is massive and has, by some estimates, 5 times the capacity of next 15 competitors combined and for now is one of the least expensive options of "renting" virtual space. The most recent research has AWS with 28% of total cloud market, followed by Microsoft (10%), IBM (7%), Google (5%), Salesforce (4%) and Rackspace (3%), though Microsoft's Azure is gaining share fast, particularly in enterprise and hybrid cloud services.