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But that's my point - the comparison isn't valid in that case. They stock it, Amazon doesn't, hence Amazon isn't their competitor. If Amazon decided tomorrow to stock the same range of jewellery or wool, those shops would be in real trouble.
The internet really is no different from your average high street, apart from the fact that the barriers to entry (i.e. start-up costs, suitable location) are lower or non-existent. However, once the business is in that virtual high street, the same principles apply. The businesses least likely to do well are the ones competing directly with a larger competitor to sell widely available goods (small corner shop vs big supermarket), and the ones most likely to do well are the ones selling specialist or high-value items (antiques, crafts, designer goods). Given that the majority of consumers will spend the majority of their money on goods that fall into the first category rather than the second means that lack of competition is ultimately a really bad thing for everyone. It's one of the big reasons (among others such as crop failure and speculation) why food and fuel, for example, have risen dramatically in the past decade, far outstripping the rate of inflation - there simply are too few players left for their to be any meaningful competition.
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