The issue is with many of these "little guys" is they are not stocking retailers, but "order brokers" who collect orders and then order in the merchandise to fulfill the orders they have received. They take minimal markup to make their pricing very attractive but it typically isn't enough to sustain their business let alone support themselves. Many of these little guys too are not the owner/operators primary source of income or employment. That means they only are able to work evenings or weekends...how many businesses have you seen fail for similar reasons?
There is room in the market for such business models, but customers do want assurances that if they order something they'll actually get it and in a reasonable amount of time. There is one well know online retailer whose business model is that of an order broker who publishes an rather large catalog of items, yet stocks little. Many of the items are "available" which means somewhere someone has them in their warehouse but may be long out of production. Hence the timeline from order placement to delivery...the vendor has to scour the globe in search of a supplier who has the item available. If indeed their inventory is correct and they in fact do have it. Add that to the fact the retailer has a "day job" the order isn't being processed when it is received, sometimes not for days adding to the delay.
These smaller retailers also have to deal with larger distributors and manufactures who are weeding out those who don't sustain a level of purchasing conducive to receive discounts others who do order more are provided as an incentive. Again this plays into the profitability of the retailer who takes a modest markup to make their prices attractive...in essence trying to buy their customers. This might work for a few months, but it doesn't work long term unless you're a major player in the market such as Wal-Mart. They aren't doing sufficient volume to offset these modest margins.
Lets not forget that many of these retailers spend little if anything on marketing outside of their own website. A few banners here and there, but no serious advertising strategy to bring in new customers. Some don't want new customers rushing to their door...for they know that they don't have the capacity to service them. Once folks start complaining about poor service its a short ride to the exit point in the market.
Lastly, fiscal responsibility...if a business isn't making enough on sales to sustain operations, most likely too they aren't paying their bills. Once a business becomes labeled as a credit risk, distributors are cutting them off. This applies not only to the little guys but the big players as well. I've written a post about just this very topic on my blog- In The Darkness Lurks Doom Nothing worse when trying to get payment from a customer to hear from them..."Call my bankruptcy attorney" ; "We're taking the necessary legal steps to close up operations" or..."The number you have reached 1 2 3 ... has been disconnected."