It would seem that the only place you can compete long term, without being faced with race to the lowest possible price, is in personalized service. People will always pay a higher price when individualized attention is a part of the transaction. And not the annoying kind through a third party who automates it.
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And that is, in general, the primary thing that has kept us going.
We can do, find, and provide things for people that you simply can't get from an automated warehouse where your order is packed by a robot.
"The automated kind" made me laugh! I was reminded on sitting on a phone to some "customer service" department, listening to "Your call is IMPORTANT to us!" over and over again... very clearly is it NOT, or I wouldn't have been on hold for 42 minutes!
In my jewelry supplies business, my edge has always been "no waste." I deal with a lot of small independent jewelry makers who are pretty broke, themselves. I can sell them "exactly 13" of something they need, that's only available in a "box of 100" from a megasupplier. So they appreciate the personal service. The "squeeze" becomes that it takes just as long to pack a $4 order as it does to pack a $40 order.