Ok i'm a distributor for high end pro audio studio gear, let me lay it out for you.
My dealers conform to a suggested retail price that is sent to me by the main principle or supplier. They can sell for less than that but its not advisable for a few reasons.
1.) Its eats into your margin. A good business model is to make at least 30% to cover overheads etc and still make something that will keep you alive. Less than that and you shouldnt be in business.
2.) If Dealer A sells for less it means that Dealer B needs to counter in order to try and win the sale. This means that if Dealer B actually gets the sale, he is making a lot less than he should (refer to point 1)
3.) Now that the client has gotten wind that he can get a discount if he pushes, he starts to play Dealer 2 against Dealer 1. So the 5% Dealer 2 originally offered gets countered by Dealer 1, so now we are sitting at 10% less. Dealer 2 now needs to win the sale back and counters with another 5%, wins the sale but is actually making a loss since his overheads cost more than the 15% he is making.
4.) Dealer 1 and Dealer 2 go out of business because the client now refuses to pay the suggested retail price and have to operate at a loss to try and make sales. Because Dealer 1 and 2 are no longer in business, the Distributor now makes no money at all and either has to stop stocking that product or goes out of business as well.
Who loses out? Everybody. The client now has to import the unit directly but have no support locally, Dealer 1 and 2 have started making soap because nobody tries to talk down the price and the Distributor has started importing chinese goods because the client no longer wants to spend the original price on that particular brand.
Without a suggested retail price or MAP as you guys refer to it, you create a bidding or price war and all that happens is the price of the product drops to such a low level that its no longer viable to sell and support. That margin is there for a reason. Margins are not incredibly high in my industry but I know that in the fish business its pretty high but then it needs to be as the cost of the items are realtively low. An average margin for a R10k lighting unit will make a very small dent in the overall overhead a retailer needs to pay so he needs to either sell more units (sure) or bump up the margin in order for it to be viable. Its just simple economics guys. Without money you cant stay in business.
You have the suggested retail price which is what everybody should stick to give or take 5% for cash or whatever, that's not price fixing. That is set so that everybody in the supply chain can stay in business and give you the client the support you need. Unfortunately that doesnt come for free.
Just remember that your salary comes from somewhere and that's margin, regardless of whether you sell ice cream, IT services or fish equipment.