My only experience selling stuff is in wood also. Lucky for me, what I make can't be made overseas.
I figure that the only advantage I have is in creative thinking - coming up with unique products and unique jigging to make those products quicker. Those people who copy probably can't come up with their own stuff, so if you start feeling the pinch, the best route is new designs rather than competing with the imitators. Easier said than done, I know, but it is about the only way I know of playing to your strengths rather than wasting time and effort fighting a fruitless battle.
In leatherworking, I'm just making stuff for my own use, so my perspective may not apply.