That’s basically what Amazon did. They did it even worse: they sold many things below cost. They ran their entire business burning cash for a long time (surviving off money raised from investors and later from going public and selling stock), driving other book stores out of business. Once they had enough market share and less competition, they negotiated tougher deals with publishers for lower costs and raised their prices to be at least a little profitable (they still sell some things loss-leader and many things at cost).

Edit: publishers, not punishers!