We spoke to Adam Ravat [link no longer available], the CEO of Foscam US, now Amcrest, about why he rejected Foscam, went with Dahua, and how up he built a business selling tens of thousands of cameras monthly.
Once Dahua develops full ranges of products and gets comfortable with the online channels such as Amazon, Dahua would do the same - undercut this sole distributor.
Apparently, this guy really tried to monopolize the channel management for Foscam and Dahua. This might work against the modern trend of multi-channel or balanced channel management strategies that you can find in any US business school textbooks.
The other question we should be asking is: how much profit % this guy squeezed from Foscam? Being the sole distributor certainly gave him a lot of bargaining power over Foscam. If he asked for too much and left Foscam little profit for reinvestment in R&D, it might legitimize Foscam's move to undercut him.
Definitely could happen, but that is why he went with "Amcrest" instead of DahuaUSA or something similar. By owning/controlling the main brand if he switches OEM's, or the OEM dumps him, he can pickup with a new supplier and keep using the Amcrest name.