One way to stand out from the competition with a drop shipping business is to private label your products. This simply means you put your own label/brand on the products that the manufacturer is creating. That way you're not selling the same product brand and just competing on price; rather you can use your own brand and face less competition. Think about when you're looking at medicine at the pharmacy; the brand names sell for higher prices and people think they are different from the generic brands even though the ingredients are exactly the same.
Home-Based Business: A home based business could fit under the category of small business, but the primary factor in this case is that it's run from home, as opposed to an office or other location. But just because a business is run from home, doesn't mean it can't compete with larger businesses. In fact, many large corporations were started from a home, including Apple and Disney. 

... For instance, some may resort to part-time rather than full-time self-employment to establish and run a social venture ( Austin et al., 2006;Korsgaard and Anderson, 2011). Others may favour this form of self-employment to jointly set up and operate a business with family members ( Baines and Wheelock, 1998;Fletcher, 2010), to work from home while caring for children and family (Thompson et al., 2009;Vorley and Rodgers, 2012) or to delay entry into full-time entrepreneurship (Folta et al., 2010). Although we recognised such arguments when portraying full-and part-time self-employment and developing our hypotheses, we leave it to future research to assess the relationship between societal culture and particular types of part-time entrepreneurship in more detail. ...
Best of all, unlike a brick-and-mortar business, you don’t need a lot of startup capital. In fact, you can get many internet businesses up and running with no money at all because so many free services facilitate the possibility. For example, you can set up a website or blog for free using WordPress. Or you can leverage a third-party site like Amazon or eBay to sell goods with no inventory costs. You use their selling platform in exchange for giving them a cut of your sales.
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