I've heard there was some other trick involved in Amazon's profits, that worked precisely because of high volume, and wouldn't work for middle / small size circulation. Something with reinvesting temporary resources during some time slot and etc. But I'm not sure how valid such claim is.
Something like this. Let's say Amazon sells 1000 items from some manufacturer. Amazon pays manufacturer with delay (let's say 20 days after they get the merchandise). But Amazon manages to sell this 1000 in 10 days (because they have massive sales scale). In result Amazon has spare money for 10 days until they need to pay. So they have a potential to use them for 10 days. That's what I've heard, I'm not sure how valid this is.
In this case, the vendor should just increase their prices to reflect the interest on the credit that they're extending Amazon for those twenty days. This is equivalent to Amazon borrowing from a bank for those 20 days, but perhaps for some reason the creditor's interest rate is lower than the bank's.
Yes, it's equivalent to a loan with no interest rate. Whether vendor has to increase prices or not - that's up to the vendor. I just described how Amazon has a potential to profit from lower than common prices and fast shipping - it increases this loan time window.
