It sounds like they are under the (wrong) impression that they will have to issue a 1099 to all companies from which they bought more than $500 during the year. That requirement has (I believe) been removed from the Obamacare regulations.
I would ask them why they think they need to see it.
Generally reputable distributors will sell only to businesses, which helps close up all the non-business people who want to buy at wholesale prices and sell it for pennies on the dollar on eBay, etc. My wife's distributors usually just ask for the EIN, don't know why they need a W9.
Part of the W9's purpose is to request a TIN. It's all clearly documented on the form.
If you're a large company and you're looking to systematize the collection of TINs from vendors and other folks you do business with, the W9 is a good way to do that. Also, many companies have their own version of the W9 (Elavon is one that comes to mind) that needs to be filled out as part of the account opening process.
LIA - They might be confused. We don't ask for W9s from our customers, but many of our vendors ask us for them. And many companies require W9s from international companies, which isn't possible, because you need to be a defined "US person" to sign a W9. Those companies should be requesting a W8-BEN. But when you try and explain this to them, they demand the W9 anyways.