It will be too easy to compete in some areas, indeed it's fairly easy to compete (with amazon) in some areas already.
My customer sells pushchairs (strollers) and prams and cots and so on. There is a thriving independent e-commerce environment in the UK with baby goods.
Amazon is supposed to be this cost-cutting behemoth that through market forces and a willingness to operate on razor slim margins will wipe out any and all competition.
Online4Baby can sell a sleigh cot bed with a drawer at £150 and Amazon's closest is at £179, even with it's 3rd party sellers.
That's just one product, but the continued existence and growth of the independent baby e-commerce operators in the UK is proof that there are areas where you can compete today. And when amazon flip the switch there will be more areas where you can compete.
What I've seen is that it's when the UK supermarkets entered the market, after one of them bought a competitor, that has had the greatest impact over the last 5 years or so.
[0] http://www.online4baby.com/4baby-sleigh-cot-with-drawer-whit...