And a US-specific aspect of your second item: the weird way US sales tax is set up meant that Amazon didn’t have to pay any for a long time, giving it an automatic ~5% price advantage in most states.
Amazon was pretty clearly trying to drastically expand its markets early on and should have been a warning bell to incumbents in other industries. For example, they bought local Seattle area Egghead Software and used that as a beachhead into the supply chain for retail boxed software. They bought all kinds of stores going out of business. For a while, you could even see other brands sell their stuff using Amazon as their main portal. Target did similar buying Mervyns for access to certain brands that it didn’t have for so long. Funny enough, Target used to use Amazon as it’s e-commerce storefront.
2, Price competition likely was less important; in Austria (and I think, Germany) there exists the "Buchpreisbindung", the price of books is mandated, no seller must offer a lower price; also, tax was always included, from day one.
They still won big, very early, very fast. I remember that an employee of a (now defunct) bookstore told me "please order via Amazon, you'll get the book faster, and I cannot offer any added value".
Ordering via a web catalog. Visiting a local bookseller takes a bigger commitment than opening a web browser.
Price competition. Amazon typically had a better price on any given book (and later, on most items) than any local store.
Delivery to home or office. Now you need to schedule a second visit to your local bookstore.