You hit the nail on the head: it is all about VAS and getting squeezed on price, especially in the supplier-distributor model. The end-user will price-shop, but unbeknownst the end-users, all the distributors get their stuff from the same few suppliers. The end-users squeeze the distributors, and the distributors squeeze the suppliers, and it ends up no one makes any money. This then gets compounded because China is raising their prices, and at times, choking off the supply chain completely. After the end-users can't find what they want, they just look online and order direct from China.

I've been convinced for quite a while that price-slashing is the ultimate killer. The only advantage US suppliers have at this point is keeping foreign-bought stock locally so that they can deliver in less than a week. End-users are learning very quick, especially with the price of software decreasing, that keeping things in-house is not only more convenient, but cost less too.