The difference between "by and with"

        vs    

Both prepositions can be used to show how something is done.

‘By’ can be followed by a gerund (-ing form):

He improved his English by reading novels.
You can change the look of that room by redecorating it.

‘By’ is followed by a noun in combinations refering to the means of transportation or communication:

by plane/car/bus/subway
by fax/mail/phone/sea

‘With’ is used when tools or parts of the body mentioned:

I opened the Pepsi with a bottle opener.
He pushed the door with his foot.

Note: ‘by hand’ means ‘handmade’, ‘made by a person, not by a machine’:

She made the pie dough by hand.