Channel conflict is largely centered on product price
When a manufacturer or brand sells directly to the end user of the product, they always have more overall margin to work with. Manufacturers have the ability to sell products at a lower price, as they can now capture the “retail” profit margin on the product.
The power to disintermediate is the central underlying factor that defines channel conflict, and must be managed by manufacturers and distributors alike to avoid alienating traditional reseller channels.
Resellers are often responsible for a very large percentage of a manufacturer’s revenues, and this must be respected.
