[iammaxus]

The margin that a reseller/distributor/retailer has on a product goes mostly to sales and marketing of those products in one form or another (ads, placement in a store, training of staff on the product, etc). If an OEM lets that margin get squeezed by low cost resellers (like a crappy ecommerce only company), their other resellers will also get their margins squeezed and therefore can't spend much to sell that product.

One common response to this is to charge different wholesale prices to different channels, but this can also be difficult to control or subject to price-fixing regulations.

Keeping the margins high for resellers = spending more on sales and marketing for your product.

I don't think non-commodity products in competitive markets should be subject to price-fixing rules in terms of setting the market price, but that's how it is in many jurisdictions today.