How can I compete with big online shops?

One of the biggest reason many business don't bother trading online is that they assume they will never be able to compete with the bigger business on the internet. "Why would people come to my site?", "we can't compete", all these are usual concerns.

If this is the case why have a business at all? Can a small toy or gift shop in a town centre really compete with the prices and stock of big giants such as Toy-r-Us, Argos etc..? No of course not, but if that's the case why do they still exist? They exist because a smaller outlet can offer things the big stores cannot, such as a more personalised service, specialist products etc

This is exactly the same on the internet, sure if you're a book seller you probably won't ever be able to beat Amazon on the prices of books however you can offer more specialised books and the more personal service.

If someone else is making money from selling a similar product to yours then there is no reason you can't make money as well; as they have already proved there is a market for it.