The explanation is alluded to in the second half of the paragraph you quoted: It was a land-grab strategy to build a customer base in the nascent online retail market.
Edit: There are other ways that Amazon leverages volume to be able to sell at what appears externally to be a slight loss, but I believe in the context of the quoted paragraph the person being quoted is simply referring to the above.
[+] [-] shunyaloop|9 years ago|reply
[+] [-] skookum|9 years ago|reply
Edit: There are other ways that Amazon leverages volume to be able to sell at what appears externally to be a slight loss, but I believe in the context of the quoted paragraph the person being quoted is simply referring to the above.