After reporting earnings last week, Amazon.com (NASDAQ:AMZN) is looking more like a retailer, and less like a tech giant. The company's merchandise sales jumped as a percentage of revenue last quarter, with very little help from extra media or cloud-service sales.

In the following video, Fool contributor Demitrios Kalogeropoulos argues that Amazon's lofty stock valuation depends on healthy growth from those non-retail portions of its business. Still, the good news for the company is that merchandise sales are getting more profitable. Gross margin is rising while shipping costs fall, making Amazon's core business as strong as ever.