Bewenched - 3:25 pm on Jul 5, 2012 (gmt 0)
Yes, Amazon competes with small merchants.
Yes, Amazon WILL outrank (especially after Panda/Penguin) your site in Google for your product KW, both in free SERPs and on G Shopping.
Yes, Amazon uses fulfillment to spot new best selling products and WILL sell those themselves.
Will Amazon also spider your ecommerce website to scrape images and descriptions for their own use .. YES. We caught them doing this a few years back... had to block their server ranges. Oddly enough, it was just after they had approached us wanting us to sell on their site. We told them no.
We've also found that they will backdoor smaller retailers and start fulfilling their own orders being supplied by your distributors.
Personally, I think Amazon should have to charge tax for every item in their stores since they have so many affiliates across the country. That should slow their sales just a bit.