Quoted from StevenP:
Why? It's a different world. Online advertising and ordering, shipping readily available to anywhere with tracking, etc. It's not like the days when you walk into a local department/hardware store to buy most of your needs, and ordering from the Sears catalog was the big mail order venture.
Like all businesses these days, price competition is erasing geographical boundaries. You want restraint of trade and reduced competition to make a comeback? Really? Higher prices for all!
the territories was to PREVENT people from under cutting each other and just selling on price alone. Channel management is not about getting customers the lowest prices - it's about ensuring everyone can stay healthy. Margin to the channel, margin to the end-user.
You hear everyone moaning about Walmart putting local businesses out of business? Very similar... the 'other' guy comes in with lesser offerings, but changes customer expectation of pricing... under cuts the incumbent who can no longer operate at the service levels they used to due to the pricing pressures. The guy either cuts his services or gets out because there isn't enough margin left in the business.
Customer gets lower prices... but due to lower margins.. there is less money in the channel to do value added services and less people interested in selling things.
"race to the bottom"