Amazon first party sales are a loss-leader for highly profitable 3rd party sales.
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I'm pretty sure that knowingly pricing products below cost (even if you make money on it via a separate pathway) is a violation of the Sherman Anti-Trust Act. Price manipulation below cost to intentionaly harm a competitor is illegal. But its AMZN so its all good.
I don't think they're doing that. They do it algorithmically too so it's a weird situation that the courts have not spoken on.
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That said, there have been times when they've done shady shit like this, see their purchase of http://diapers.com
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