Difference Between Vendor and Manufacturer (With Table)

Business is an activity in which involves buying and selling various products and services for the purpose of making a profit. There are different types of businesses based on the scale of business and the type of products or activities sold. Similarly, there are different people involved in business like Vendors and Manufacturers.

Vendor vs Manufacturer

The difference between Vendor and Manufacturer is that manufacturer processes raw materials into finished goods and services. And the vendor sells the finished goods and services to the consumers. There are various other differences between a vendor and a manufacturer, including their objective, quantity of products, business relations, risks, and consumer relations.

A vendor is a person who is involved in the process of purchase and distribution of goods and services to the consumers. He acts as an intermediary between the manufacturer and the consumer. And is the last person in the process of selling goods and services to a consumer.

A manufacturer is a person who is involved in the process of converting raw materials into finished goods and services. He may sell his products directly to the consumers or indirectly through vendors. And is the first person in the process of selling goods and services to a consumer.

Comparison Table Between Vendor and Manufacturer

Parameters of ComparisonVendorManufacturer
ObjectiveThe objective is to sell the products and services to the consumers.The objective is to sell products and services to vendors.
QuantityA small number of goods and services are sold.A large number of goods and services are sold.
Market RelationsA vendor maintains B2C market relations.A manufacturer maintains B2B market relations.
RisksThere is less risk involved as goods and services are sold on consumer demand.There is a greater risk involved as goods and services are manufactured first.
Consumer RelationsA vendor has close relations with the consumers.A manufacturer has distant relations with the consumers.

What is Vendor?

In a supply chain, the products and services are produced, manufactured into a finished product or service, and sold to the next member in the chain and finally to the consumer. A vendor is a member who is involved in the process of buying and selling services directly to the consumers. He is an intermediary link between the manufacturer and the consumer. A vendor can be an individual or a group.

A vendor buys different finished products and services from different manufacturers. These products are then stored in a storage unit or directly sent to a shop. After which these products or services are being sold to the consumers. A vendor can conduct the buying and selling activities in person or via the internet. Nowadays, with this new age of technology, buying and selling online has become easier and convenient than the other offline methods. With the help of digital marketing, a product can be better advertised at lesser or no cost.

A vendor maintains close relations with the consumers, because of which he knows the demands of the consumers. The products and services which are purchased by the vendor are based on these demands. And in a small quantity or a quantity equivalent to the consumer demand. Because of which a vendor is at a comparatively lower risk. 

What is Manufacturer? 

The process of converting raw materials into finished goods and services to meet consumers’ demands is known as a manufacturing process. And the person who carries out this task or is involved in this process of transforming raw material into finished products is called a manufacturer. A manufacturer can be an individual, group, or association.

A manufacturer buys the raw materials from the producers or even produces them on his/her own. Once the raw materials are brought in, they are sent for manufacturing. Manufacturing is done with the help of tools, machines, labor, or even different processes, including chemicals and formulations. These manufactured products or finished goods are then sent to a storage unit, and later on, sold to different people.

A manufacturer sells its products to vendors. However, he can choose to sell his products directly to the consumers in person or on the internet. The products are manufactured first then advertised, and the consumers may or may not like the product. Due to the constant changes in demand, by the time products are manufactured, the product may lose the demand. Because of such reasons, a manufacturer is at a greater risk than other members involved in the supply chain.

Main Differences Between Vendor and Manufacturer

  1. A vendor’s objective is to sell the products and services to the consumers. Whereas a manufacturer’s objective is to sell products and services to vendors.
  2. A vendor sells a small number of products and services, while a manufacturer sells products and services in bulk.
  3. A vendor maintains B2C market relations, and the manufacture maintains B2B market relations.
  4. A vendor faces less risk as the goods and services sold are based on consumer demand. Whereas a manufacturer faces more risk as the goods and services are produced first.
  5. A vendor has close relations with the consumer. On the contrary, a manufacturer has distant relations with the consumer.

Conclusion 

The vendor deals with goods in smaller quantities and the manufacturer in a larger quantity. The former has better relations with the consumers than the manufacturers and has lower risk than the manufacturers.

Even though vendors and manufacturers are a part of the supply chain, they are two different members involved in different activities. The world of business is vast. The industry and its trends keep changing now and then. As a result, it has become very competitive because of which it is very important for every member of the supply chain, including manufacturers and vendors, to be active. 

References

  1. https://www.sciencedirect.com/science/article/pii/037722179190033R
  2. https://journals.sagepub.com/doi/abs/10.1177/002224298404800407
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