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The template only earns its keep if you actually put two cases next to each other.

This is the reason every teardown answers the same questions in the same order. Put a luxury house beside a console platform and the differences stop being vibes — one is refusing sales to protect a price, the other is selling below cost to collect a toll, and both are defending a moat.

Case ACase B

Retail · NYSE: BBWI

Bath & Body Works

A $7.3 billion seller of scented soaps, body mists and three-wick candles, born as a side project inside Les Wexner's mall empire, that turned out to be the profitable half of L Brands and is now trying to stop being a mall store without breaking the machine that made it rich.

Technology · NASDAQ: AMZN

Amazon

Runs a near-breakeven retail operation at enormous scale, and earns essentially all of its profit from renting out the two things that operation forced it to build — computing capacity and shelf placement.

The thesis in one line

Bath & Body Works never sold scarcity. It sold the feeling of scarcity, on a product it can make in Ohio by the million, and the customer came back every season to find out what had gone.

The store is not the business. The store is the customer acquisition cost for the businesses.

Verdict

Watch it

Own it

Moat

Narrow

Brand · Process power · Scale economics · Distribution

Wide

Scale economics · Network effects · Process power · Switching costs

Porter's five forces

Competitive rivalry

Threat of new entrants

Threat of substitutes

Buyer power

Supplier power

Competitive rivalry

Threat of new entrants

Threat of substitutes

Buyer power

Supplier power

Headline figures

Net sales: $7.29B
Adjusted operating margin: 15.9%
Active loyalty members: ≈ 40M
Stores: 1,927 + 573

Net sales: $638B
AWS share of operating income: ~58%
Retail operating margin: ~5.4%
Third-party share of units: ~60%

Unit economics

One three-wick candle (illustrative — the company does not report product-level costs; the split below applies its FY2025 reported ratios to an assumed average selling price)

The candle's list price is a reference point, not a price. Almost nobody pays $27.95, the company knows it, and the whole system is built to make a $16 candle feel like a bargain and still clear fifteen cents on the dollar. The risk is not that the discount exists; it is that the customer learns the list price is fiction and the average realised price drifts towards $9.95.

One $50 third-party item sold through Amazon

Amazon captures roughly 38% of the sale price and carries none of the inventory risk. The seller took the risk, paid for the warehouse, and then paid again to be found in a search of Amazon's own catalogue.

What would change her mind

Two consecutive quarters of positive total sales growth in 2027, with stores flat or better rather than marketplaces carrying the whole gain, would tell me the core customer is coming back and I would move to own it. A third year of decline, or a cut to the dividend, would move me to pass.

If AWS revenue growth falls below 15% for two consecutive quarters while segment operating margin also declines, the cloud business is being commoditised rather than merely contested, and the capex is being spent defending share rather than buying growth. That combination — decelerating growth and compressing margin at the same time — breaks the thesis outright. A single weak quarter on either measure alone does not.

2 mechanisms in common

vertical integration own the customer