The other big draw to Amazon, for me, is the reviews. I know it's not perfect, but by and large, items with 4 or 5 star reviews tend to be good. Going outside Amazon leaves me without that, most of the time. Add that to your federated system and I'm sold.
But everyone is looking on Amazon first. I know I would. Most have Prime and want to use it above anything else.
Prime isn't sustainable on its own. Amazon can make the loss and still convince investors to stick around. Mom and Pop can't ship you something via airplane for free AND cut price by half.
And how do you best do that?
Build your own channel and don't depend on Amazon.