Actually manufactures have all the control of their reseller channel, they can cut off any distributer at a moments notice or they can add additional margin for dealers that do a good job.
Often times people with all the best intentions become distributors, in the first year everything is great, lots of sales, support is manageable with great cashflow. The second year is a lot more challenging, you still have to support the first year customer and if the manufacturer doesn't add any improvements to existing product that the reseller can up sell then that reseller is supporting those first year customers in the second year for free, you have the added support pressure of new second year customers and most "new" resellers don't budget for returns and extra shipping etc.. So cashflow in the second year can become painfully tight. If manufacturers don't continue to upgrade their product line then it becomes very difficult for resellers to forecast any future revenue.
Yes things happen but they happen a lot in this "industry" in part because I don't think the manufactures really understand how to manage a large reseller channel, they pretty much signup anyone with a heartbeat. That's not to say that some of them don't go on to become great resellers but they are few and far between.
