A business, by definition, is a profitable or non-profitable company or organization that is engaged in many enterprises or professional activities.
In business, many terms and conditions are not understood by the general, and all know some terms.
Once we start talking about the supply chain in business and business relations, the most common terms one may come across are vendors and suppliers.
They both work towards fulfilling the requirements of the customers or consumers but hold different roles to do so.
Key Takeaways
- Vendors are entities that sell goods or services to customers; suppliers are entities that provide raw materials or components to manufacturers or vendors.
- Vendors have a direct relationship with the end customer, while suppliers work primarily with other businesses in a supply chain.
- Vendors may offer a wider range of products or services, while suppliers tend to focus on a specific type of product or material.
Vendors vs. Suppliers
Vendors are external to the organization and may be selected based on price, quality, and availability. A supplier is a company or individual who provides goods or services to support another business. They are part of the organization’s supply chain and may be involved in the planning and execution of operations.
A vendor is an individual or a company that sells the products. They hold B2C business relation as they hold business directly with the consumers. Their main aim is to supply the products required by the consumers.
A supplier is an individual or company that supplies the raw products required for the products to the manufacturers or are the manufacturers. They sell the finished products to the vendors in large quantities for them to enter the profit market.
Comparison Table
| Parameters of Comparison | Vendor | Supplier |
|---|---|---|
| Meaning | The vendor is the person or company that offers products for sale | The person or company that sells the products by the manufacturer is the manufacturer |
| Relation to consumer | They have a direct relationship to the customers | They have an indirect relationship with the consumers |
| Quantity | Sell smaller quantities of the product | Sells the product in bulk to the vendors |
| Business relation | Direct business to the consumer or B2C | They only link from one business to another or B2B |
| Aim of business | To supply the product required by the consumers | To create or supply raw materials for products according to the manufacturer |
| Objective | The main objective is to sell the products | Creating the products |
What is a Vendor?
A vendor is an individual or company that sells products that meet the customer’s requirements. They sell in small and required quantities to consumers.
They have direct business with the customers and therefore have B2C business relations. Their main objective is to sell products that fulfill the customers’ desires.
They have lower risk rates than wholesale because they can return all the products to the supplier.
They buy the products in consignments and, in return, sell them to companies or wholesale retailers. They can sell directly to the consumers as well.
They are the lowest in the business supply chain and the closest to the customers. So they indirectly relate to the manufacturer if the suppliers are not the manufacturer.
What is a Supplier?
Suppliers are the people or companies who create or sell the products’ required raw materials. This is supplied to the manufacturers directly unless they are directly the manufacturers.
Because of the suppliers, a product that fulfills the customers’ requirements enters the business market as they sell them to the vendors in bulk or large quantities.
They are at the highest position in the supply chain. So they have a direct relationship with the manufacturers and are closer to the vendors than the customers.
The relationship between companies and suppliers is greater than that with the vendors since they deal with the business between two companies or enterprises.
This means that while the business with vendors can be cut easily, this is not the case with suppliers.
Main Differences Between Vendor and Supplier
- A vendor is an individual or a company that sells products produced by the manufacturers or supplied by a supplier. On the other hand, a supplier is an n individual or a company that sells the products by the manufacturer or is the manufacturer.
- Vendors have a direct relation to the customers/ consumers. They sell the products directly to the customers. The supplier indirectly relates to the consumers since they supply the products to the vendors, who in turn supply them to the customers.
- Since suppliers are the ones who supply the raw materials for manufacturing the product or are the manufacturer, they sell the products in bulk or large quantity. The vendors sell in small quantities.
- The vendors have a B2C relationship as they have direct business with the customers. But, the suppliers have a B2B relationship in business since they hold or link other businesses.
- The main aim of the vendors is to sell the products that the customers require. Contrary to this, suppliers aim to create or supply raw materials for manufacturing products to the manufacturers.
- A vendor’s objective is selling the products to the consumers, whereas a supplier’s objective is making or creating the required products.
- http://www.protectionmanagementllc.com/wp-content/uploads/2014/05/HIPAA-Compliance-for-Vendors-and-Suppliers.pdf
- https://journals.sagepub.com/doi/abs/10.1509/jmkr.41.4.479.47015
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