How do they do it? That's a good question. I have heard but don't know for sure, that they can do it because they don't have to be profitable. Unlike Walmart, Wall Street is willing to finance whatever they want to do, at any price. Regardless of profitability.
Most of the time online shopping works out, but when it doesn't, it's a lot of trouble. At least that's my experience. I've had gifts lost that weren't available to give on the required date. Had to return stuff and that is a lot of trouble.
The variable pricing is also a huge turn off for me and I try to avoid Amazon in particular. I just can't stand haggling. I try to shop local but will order online from other retailers. I recently shopped amazon for an ac manifold gauge set. They continually try to get me to try prime, which I don't want. I got to checkout and it said they were only available to prime customers. Went on Advance Auto's site and ordered a beautiful set for the same price, free shipping and had it in two days. If there's a problem I can take it right over to my local advance.
If my car's up in the air waiting for parts, I'm going to NAPA or Advance. I know I'm getting a quality part, I can inspect it on the spot, and if there's any problem, I can drive back over there in 10 minutes and have the problem straightened out.
Amazon put my local Sears Hardware out of business. Now if I need a snap ring to get the mower running again, instead of going to get one and having the machine up and cutting again in an hour, I have to order a bunch online and wait for them to be shipped. No more local hardware store.
I imagine a drone can deliver a paper clip pretty easily. Not at all sure about a tire. That's going to get expensive.