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His foresight and confidence is commendable. So is his leadership - steering a company of tens of thousands of people towards the vision/mission he sets is incredibly hard to execute, and he's done it for decades now
I'm also surprised at how convinced he was about taking care of the customers. The customer comes first: and it is the ultimate goal. It's what made Amazon successful. I remember my first problem with Amazon, a book that came in a bit broken (one angle was crushed), the customer support responded the same day of presenting the complain and they've told me to take it to the nearest library, which they had already sent the order to send me a new one. When I read that email, they earned it a loyal customer for life.
This is just some armchair quarterbacking, but I suspect that this kind of "no questions asked" customer service is very good at retaining new customers but may not be a profitable practice long term. It may be that Amazon is able to keep this going due to subsidies from other, profitable portions of their business.

I have seen lots of companies with permissive return policies that seem to erode over time. REI comes to mind. Best Buy also used to be much easier to return things. Costco might have a winning plan by requiring membership and retaining a higher income customer.

The way gas stations work, with profits on the attached convenience store or fast food, seems to show no signs of changing. So I don't see that having Amazon operate at break-even or a slight loss, subsidized by AWS, is necessarily unsustainable.
No, but it will go away once they drive out all competitors that don't have a separate cash cow.
I actually don’t think their customer service is anything to write home about. The only thing nice about it is the willingness to refund things and not take them back, so much so that it feels uncomfortable.

Customer service will bend over backwards for you but getting them to understand simple concepts is infuriating. It’s all heavily scripted outsourced call centers that waste time with fake empathy.

The way they default you to doing returns that don’t go back to your original payment method is also hostile. The option to refund to the original credit card is buried below two other options.

Another one is how it’s now incredibly hard to get a prorated refund on Amazon Prime annual plans. That used to be the default option, now it’s an infuriating 30 minute online chat with 3 different people who misunderstand you in the exact same way.