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Can my site succeed if there is lot of competition in my market?

Yes, in fact that's a great sign that you are in a good market. One of the biggest mistakes in business is to think that the best ideas are those that are unique and new. In fact 99 out of 100 successful businesses provide products that have been sold for decades by hundreds of suppliers.

The trick is to build a relationship with your customers so that they know, like and trust you. People buy from amazon.com not mainly because they offer the best price, but because they like the brand and trust the system.