In some ways Amazon's entshittification is others' gain. For example, Amazon used to be a place you could easily buy and download music files legally. But they entshittified their music product to the point where it was impossible to use. Others stepped in selling lossless format downloads with a good buyer experience and made nice businesses out of them. The same will happen in all other areas previously dominated by Amazon.
I'm not sure how. Their warehouses and deliveries are very efficient. I'm sure it cost a fortune to build out. Hard to compete with without a ton of capital.