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...
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.
Vy insightful.