Jaye Manus has a great post on the competition among books. Obviously, there's a hell of a lot of books out there, so how are you going to stand out?
Well, as Jaye points out, you really aren't competing with all those books:
You might have written the very best ghost story in the history of the world, but if the reader is looking for a how-to book on plumbing, your ghost story will go unnoticed. Even if the reader can’t find the right how-to book, you’re still out of luck. They want plumbing advice, not ghosts. The how-to book is NOT your competition.
So, the key is to identify your actual competition, i.e., books like yours, and then start hustling.
I agree completely, and I would add that, once you find your actual competition, you should stop thinking of them as competition.
Think of them as honeyguide birds and yourself as a honey badger (seriously, click on the link and watch that video, it's awesome). Honeyguide birds are actually more than one kind of bird, but they all eat honey and other bee products. That's a lot easier to do if some other honey eater has ripped open the hive first, so they find hives and then lead other animals to them.
Terrific, huh? It's a symbiotic relationship--everybody gets more honey. Well, except the bees, who do kind of lose out in this scenario.
Readers who like your kind of book, however, are going to benefit. And, yeah, that's where I'm going with this analogy: Let's say you write Stephen King-like horror novels. So you market them to people who like Stephen King--he is your honeyguide! The readers benefit; you benefit.
Does Stephen King benefit? Well, maybe not, because he's been around for a while and has probably already saturated his market. But it's not going to hurt Stephen King--this isn't a parasitic relationship--because people can read Stephen King's books waaaaay faster than he can write them. He can saturate his market audience-wise--he can find every one who likes his kind of book. But he can't saturate it book-wise.
Even after he's eaten his fill of honey, there's some left for you.