The smaller ones piggybacking off of Ebay and similar generally turn a (small) profit immediately. However, the large ones with innovative storefronts and the Google-like classy looking top notch websites are always making massive losses, often for many years at a time.
The reason for this is that investors hope that the wave of people moving their lives/shopping online will turn these big players into the next Walmart - which is almost exactly what is happening with Amazon now. So the strategy is not a terrible one, just a risky one.
Amazon was not profitable for 10 years, because revenue did not exceed variable+fixed costs. But revenue exceeded variable costs. They had losses for 10 years, but had positive margine.
The reason for this is that investors hope that the wave of people moving their lives/shopping online will turn these big players into the next Walmart - which is almost exactly what is happening with Amazon now. So the strategy is not a terrible one, just a risky one.