One of the first things that distributors should recognize is that once you use the Internet, it makes it easy for manufacturers to sell direct. Now, this is nothing new. Manufacturers have always been able to go direct. The Internet just makes it easier.
If a distributor does not add value to the products they sell, more customers will be more likely to go directly to the manufacturer.
I think it's going to take a team effort between the manufacturers and distributors to not allow the reverse auction to get out of hand.