(FORTUNE Magazine) – Barnes & Noble has Amazon. Toys "R" Us has eToys. So you'd think by now that Home Depot would have its own raging bat-tle with some do-it-yourself Web e-tailing upstart. Instead, the $30 billion retailer has found trouble on the Net in its own backyard: Ames.com, BlackandDecker.com, Rubbermaid.com, Whirlpool.com--all Home Depot suppliers, all planning to hawk their wares over the Web. As far as Home Depot is concerned, a supplier with a Website can be far more dangerous than any Amazon.

In a letter obtained by FORTUNE, the company recently issued a Godfather-esque directive to all suppliers selling products over the Internet. The gist of it is, Cut it out or we'll cut you off. "Dear Vendor," the letter, dated May 19, begins. "It is important for you to be aware of Home Depot's current position on its' [sic] vendors competing with the company via e-commerce direct to consumer distribution. We think it is short-sighted for vendors to ignore the added value that our retail stores contribute to the sales of their products.... We recognize that a vendor has the right to sell through whatever distribution channels it desires. However, we too have the right to be selective in regard to the vendors we select and we trust that you can understand that a company may be hesitant to do business with its competitors."

All this to stop a couple of glue guns from being peddled over the Internet? No, it's a bit scarier than that. What Home Depot rightly worries about is losing control over its customers. If they can go straight to the manufacturer, why would they need a middleman? And if the manufacturers can sell size-12 nails to the Bob Vila crowd directly, why deal with Home Depot?

By now, it's abundantly clear where the Web is heading. Though e-commerce still makes up less than 1% of the total retail market, it is growing fast. According to some estimates, online sales this year should more than double, to around $36

billion--and manufacturers are eager to cash in. "Every manufacturer we talk to intends to put a store on the Internet," says Joel Ronning, CEO of Digital River, which provides back-office e-commerce services to both suppliers and retailers. As Home Depot lumbers its way toward creating an e-commerce site ("It should be coming sometime this fall, or maybe this winter," a spokesman says), its suppliers are already there or will arrive imminently. Rubbermaid.com sells such items as the ActionPacker Tool Box for $10.99; Ames.com offers up a Wrecking Set that includes a drill hammer and safety goggles for $35.95. Another vendor, Whirlpool, is launching a joint venture with Hearst and Boston Consulting this fall, called Brandwise.com.

In the power game between retailers and suppliers, the so-called big-box shops like Home Depot have always had the upper hand. You want to sell hammers, you do what Home Depot wants. But the emergence of vendors' retail Websites is changing the balance of power. For example, Ames' Easy Roller wheelbarrow couldn't get into Home Depot's stores because it was the wrong shape for its shelves. It's now selling briskly on Ames.com for $124.95. "The Web is the great equalizer," says Ames marketing director Cary Gregory.

This is not to say that going up against Home Depot will be easy. Remember that Home Depot is one of the great retailers--the "category killer" that handily drove hundreds of mom-and-pop hardware stores out of business. Who's to say it can't do the same to pesky suppliers with dot.com dreams? (Indeed, Home Depot is featured in this issue's retirement guide. See "Ten Stocks to Grow With.") At least one supplier, Stanley Works, the tool manufacturer, scrapped its e-commerce plans. "Our retailers said, 'We would prefer it if you did not compete with us,' " explains a Stanley spokesman. Rubbermaid, though it intends to continue selling online, says it's not advertising or promoting its e-commerce site. "We try not to draw attention to ourselves," one executive at Rubbermaid told FORTUNE nervously. "It's a very sensitive issue."

And if Home Depot gets its way, selling power drills and fertilizer and riding mowers on the Web will work the same way it does in the real world--with Home Depot in charge. "We hope our vendors will partner with us," offers Jeff Cohen, the company's Internet chief, when asked about suppliers setting up shop online.

Who will rule the Web for the do-it-yourself set? That's not at all clear, at least not yet. "They think the Web is their domain," says a manufacturer who asked not to be identified, fearing Home Depot's retaliation. "We think it's ours."