"I mean, who can compete with smokingpipes.com?"
Those who a) provide a comfortable environment for pipe smokers to hang out, and b) carry items that SmokingPipes does not (i.e., estates, aged tins). These days, if you have a smoking area -- or simply a comfortable shop to stand around in, maybe with a few stools -- that can be priceless for pipe smokers. And I also think that shops that carry a good selection of estates will always stand out. After all, it's not like estates come in identical multiples: your stock will be different from everyone else's out there. I also think that B&Ms could win a lot of fans by ordering tins that they just let sit for a couple of years. I realize that's a financial commitment, but a tin with even three years of age on it could be sold for more than a brand-new tin. And the lure of aged tins could generate good traffic.
I'm not saying that running a tobacco shop is a guaranteed money-maker these days. It's probably a lot like the winery business. When I was doing a lot of travel writing, I used to to hear a lot of winery owners tell the same joke: "Do you know how to wind up with $1 million after a year running a winery? Start the year with $2 million." But for those who are passionate about this and able to bear the financial risks involved, there is still, clearly, a market.
Bob