AMZN's Economic moats

$Amazon(AMZN.US)$ ’s retail business enjoys strong purchasing power and an unrivaled distribution network. As a result, Amazon is able to provide a very large selection of goods at very attractive prices to customers while offering a very convenient way of shopping (one-day free delivery…). Third-party sellers benefit from the attractiveness of Amazon’s marketplace. Indeed, Amazon has such a strong reputation that most consumers go directly to Amazon to start their product searches (instead of using Google search). Like every successful marketplace, it benefits from a network effect: the increasing number of buyers attracts sellers (bigger client pool), while the increasing number of sellers (deeper production selection) on the platform attracts buyers. Finally, the third-party business strengthens the advertising business, as 3P sellers are also big consumers of advertising that they use to push customers towards their products.
The development of Prime memberships further strengthens the retail business. By providing paying-consumers a one-day free delivery option, video streaming service, music content, Kindle unlimited, and other services, Amazon retains its most loyal (and profitable) customers. Such initiative is even more interesting for the company as Prime memberships provide high-margin recurring revenue.
The cloud business (also known as infrastructure-as-a-service or IAAS) is a business of scale. Given it requires large upfront investments, company with the largest client base is more likely to be more profitable as it can spread fixed costs over a larger number of clients. In addition, Amazon has extensive skills for managing its infrastructures, which results in higher margins. For instance, back in 2017, when AWS’s business size was similar to the actual size of the Google cloud business, AMZN was able to print a 25% operating margin whereas Google is currently loss-making.