But perhaps the most vivid example of how badly online middlemen are stumbling is in auto sales. The dealership has since canceled its deals with all of them. As a consequence, the owner predicts that the remaining three will be gone before long, and he will instead rely solely on promoting his own web site. It partly comes down to dollars and cents. But it also comes down to control.
Control is very important, be it for a manufacturer, customer, or middleman.
Thus, aviationX Inc. , a web company that hoped to be the middleman for airlines and their suppliers, had to bow out when giant aerospace companies such as Boeing , Lockheed Martin , and Raytheon formed their own online exchange and were soon joined by the major airlines. One of the things that the online middlemen may have underestimated was the extent to which the traditional middlemen would fight to maintain their traditional roles and traditional manufacturers and retailers would fight to increase their control of the marketing and sales process. Thus, we've seen the major airlines try to muscle aside conventional travel agents by cutting commissions to the agents and selling tickets directly to consumers. Clearly, the Internet is shaking up the supply chains in many industries. It's just not shaking things up exactly the way the Internet upstarts always expected.