Change in inventories is only one component of capital required. There are many other components. There are great businesses that carry lots of inventory. Every business is different.
Amazon, in particular, is a large entity incorporating numerous businesses (AWS, Prime, Alexa, Merchant Services, proprietary brands, etc.) that are different from each other. Each should be analyzed on its own, because their dynamics are different. For example, Merchant Services is a platform for third-party sellers. They, not Amazon, are the ones who pay upfront for the inventory. They pay Amazon to store and manage that inventory. When a product in that inventory sells, Amazon gets to collect the money upfront from consumers. The sellers get paid sometime later.
The portion of invested capital tied up in inventory is not sufficient to judge a retailer. What we want to know/estimate is the retailer's return on invested capital (ROIC). A retailer with significant competitive advantages that can generate above-average ROIC for many years to come is a good business. If, on top of that, that retailer can be acquired at a sensible valuation in relation to such future ROICs, it would also be a good acquisition.
Amazon, in particular, is a large entity incorporating numerous businesses (AWS, Prime, Alexa, Merchant Services, proprietary brands, etc.) that are different from each other. Each should be analyzed on its own, because their dynamics are different. For example, Merchant Services is a platform for third-party sellers. They, not Amazon, are the ones who pay upfront for the inventory. They pay Amazon to store and manage that inventory. When a product in that inventory sells, Amazon gets to collect the money upfront from consumers. The sellers get paid sometime later.
Here's a decent primer on estimating return on invested capital: https://www.morganstanley.com/im/publication/insights/articl...