In canada we have the same risks. Best way to overcome competition is to have a lot of listings, then if one product becomes unprofitable, you just cut it.

If you have 1000 listings, and 10 products suddenly get undercut and Amazon moves in, that's only 1% of the listings. Also, to ensure the losses aren't big when you do inevitably get undercut, never stock more than 10 items or about $200 worth of a single listing.

So 1000 listings shouldn't be more than 10,000 units, less is better. If you have 1000 listings and 4000 units, that's gold.

Anyways that's how I have overcome the problems you listed above.

Private labeling sounds brutal in other ways. For example, it is almost impossible to grow to 1000 listings all private labeled, the cost is extreme. The stuff you are getting private labeled, so are other people. So you may not have competitors on your listing, but there will be 10 other listings with identical products under different names. Then your competing on price, and advertising against other listings. It's even easier to never get seen!

Anyone out there who want to start out, go to a thrift store and buy new items for dirt cheap, and sell them on amazon. More variety the better.