Vendor vs Subcontractor: Difference and Comparison

A vendor has a business that is selling products or services to customers. Subcontractors, also known as contractors or sub-subcontractors, are the individuals who make the machinery or tools used in construction.

Vendor and Subcontractor may seem mystifying, confusing, and exceptionally similar, yet they are different.

Key Takeaways

1. Vendors supply goods and services directly to a company, while subcontractors provide services under the supervision of a primary contractor.
2. Vendors have a more transactional relationship with companies, whereas subcontractors work closely with the main contractor to complete a project.
3. Subcontractors possess specialized skills for specific tasks, while vendors offer a broader range of products and services.

Vendor vs Subcontractor

A vendor is an individual or company that sells goods or services, directly to the end consumer. A subcontractor, on the other hand, is hired by the primary contractor to perform specific tasks or services as part of a larger project, in industries like construction.

Vendors are people that are allowed to sell products or services through retail trade, moreover, someone who sells goods or provides services to other companies.

The relationship with the customer defines the person’s role as a vendor. This includes manufacturers, wholesalers, distributors, and retailers.

The Subcontractor refers to those who work as temporary workers under a contract that provides them with a fixed fee to perform a particular job.

Subcontracting may involve either a one-time or ongoing relationship, allowing flexibility for both parties involved.

Comparison Table

Parameters of Comparison	Vendor	Subcontractor
Definition	A Vendor is someone who sells goods or provides services to other companies.	The Subcontractor is the individual who makes the machinery or tools used in construction.
Work	The Vendor does not work under the direct supervision of the company.	The Subcontractor works under the direct supervision of the company.
Authority	The Vendor keeps the ownership of the goods produced or the services performed for the clients.	The company maintains all control over the Subcontractor’s actions, including hiring and firing.
Registration	Vendors are required to register with government authority.	Subcontractors are not required to register with any government authority.
Customer-relationship	The Vendors role is defined by the pleasing relationship with the customer.	Subcontractors do not need to keep a pleasing relationship with the customer.

What is Vendor?

A vendor runs a business where the manufacturers sell products or services.

To be a Vendor, however, a person has to register with a government agency and comply with the regulations that the agency lays down.

The relationship with the customer defines the person’s role as a Vendor. The customer may have purchased from the Vendor before and have been the consistent source of business.

A vendor is someone who sells goods or provides services to other companies but keeps ownership of the goods he produces or the services he performs for his client.

The customer always buys from the Vendor for their internal use and not for resale. This includes manufacturers, wholesalers, distributors, and retailers.

A Vendor does not have a business that is actively pursuing sales, manufacturing of products or services, and providing services to customers where one business buys products or services from another business.

For example, a business may purchase office supplies from a vendor. As a result, the vendor then fulfils the order by providing the office supplies and the invoices.

What is Subcontractor?

A Subcontractor is someone hired by a company for a specific project where they work under the direct supervision of the company.

The company maintains all control over the Subcontractor’s actions, including hiring and firing.

The Subcontractors are employees of their own companies, but they are always working on projects given to them by other companies for which they are paid.

Subcontractors, also well-known as contractors or sub-subcontractors, are the individuals who make the machinery or tools used in construction.

An example of a Subcontractor is when they hire themselves out to help with some tasks on a construction site.

Some of these tasks may include pouring concrete, erecting scaffolding, operating heavy machinery, installing windows doors, and working on outdoor painting jobs.

Subcontractors can also be individuals or organizations who supply the construction equipment, material, and labour required to complete the project.

Subcontracting may involve either a one-time or ongoing relationship. When used in a one-time or ongoing relationship, it allows for flexibility for both parties involved.

Subcontracting companies may also provide goods and services on behalf of a company that does not want to be directly involved in the manufacturing process.

Main Differences Between Vendor and Subcontractor

1. A Vendor is someone who sells goods or provides services to other companies, whereas the Subcontractor is the individual who makes the machinery or tools used in construction.
2. The Vendor does not work under the direct supervision of the company, whereas the Subcontractor works under the direct supervision of the company.
3. The Vendor keeps the ownership of the goods produced or the services performed for the clients, whereas the company maintains all control over the subcontractor’s actions, including hiring and firing.
4. Vendors are required to register with government authority, whereas, Subcontractors are not required to register with any government authority.
5. The Vendor’s role is defined by a pleasing relationship with the customer, whereas, Subcontractors do not need to keep a pleasing relationship with the customer.

References

1. https://journals.sagepub.com/doi/abs/10.1177/2277975220942078
2. https://www.sciencedirect.com/science/article/pii/037722179190033R
3. https://www.sciencedirect.com/science/article/pii/S030505480600030X