Suppose that the manufacturer is in a very competitive market selling at $3.50, and the other levels of middle-men have better profit margins. In that case the 8 cent shift is a 16% improvement in company profits. 8 cents doesn't sound like a lot, but 16% makes shareholders notice.

If competition is really fierce and margins are tight (remember, this is the kind of market being pushed hard by Walmart, etc), then the gap could literally be between being profitable and not profitable. It doesn't matter how much profit people later in the business pipeline are making. If you can't negotiate prices where you personally make a profit, you go out of business. Period.

Cheers,
Ben