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
Last Updated : 11 June, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
The distinction between vendors and suppliers is presented in a very informative manner, catering to those with little knowledge of these concepts. The emphasis on key takeaways is particularly valuable.
Precisely. The clarity of definitions and comparisons in the article makes it an effective and educational read for individuals unfamiliar with these terms.
I concur with your observation. The article’s clarity and educational value are commendable, making it accessible to a wide audience.
This article provides an insightful explanation of the differences between vendors and suppliers. The key takeaways are very useful for understanding the business relationships involved. I appreciate the detailed comparison table as well.
I agree with you. The article’s clarity in defining the roles of vendors and suppliers is commendable. It really helps to clarify the misunderstood terminologies in business.
I’m not convinced that the vendor-supplier relationship is as distinct as presented in this article. It oversimplifies the complexity of business supply chains and relationships between different entities.
I partially agree with your point, George. The relationship between vendors and suppliers is indeed more intricate, but the article serves as a good starting point for beginners in business studies.
I understand your perspective, but the article aims to provide a basic understanding for those unfamiliar with these terminologies. It serves its purpose in a clear and concise manner.
The clear distinction between vendors and suppliers, along with the detailed comparison table, makes this article an enlightening read for those seeking to understand the intricacies of business relationships. It’s an excellent addition to educational resources in this area.
I couldn’t agree more. The comprehensive explanations and structured comparison make it a valuable resource for anyone looking to grasp the fundamentals of vendors and suppliers in the business domain.
The portrayal of vendors and suppliers is rather simplistic in this article. It lacks the depth to truly capture the multifaceted nature of their relationships and operations within the supply chain.
I understand your perspective, King Tara. However, the article seems to cater to providing an initial understanding, and the depth you seek may be better suited for more advanced literature in business studies.
The basic nature of the article is well-suited for beginners to comprehend the overarching roles of vendors and suppliers without overwhelming them with excessive details.
The clear distinction between vendors and suppliers is a valuable aspect of this article. It helps in enhancing the understanding of their roles in the business supply chain.
Absolutely. The explanation of how vendors sell products directly to customers and suppliers provide raw materials to manufacturers is well-articulated and informative.
The comprehensive explanations and engaging comparison table in this article make it a highly informative and beneficial piece. It effectively serves the purpose of elucidating the key differences between vendors and suppliers.
Absolutely, the detailed nature and clarity of the article are commendable. It’s an excellent resource for those seeking to grasp the dynamics of business relationships.
The comparison table and the detailed explanations have made the differences between vendor and supplier quite clear. It’s a resourceful and educational read for anyone looking to understand these terms.
I couldn’t agree more. The article effectively breaks down complex concepts to facilitate better comprehension. It’s valuable for those entering the world of business.
The meticulous details and the structured comparison table are commendable. It’s a well-rounded article that adds significant value to the understanding of business dynamics.
I find the article’s focus on differentiating between vendors and suppliers quite beneficial for establishing a foundational understanding of these terms in the business context. It serves as an essential learning resource in this regard.
Indeed, the article effectively demystifies the terminologies associated with vendors and suppliers, offering a comprehensive and clear understanding of their respective roles and relationships in business.
I agree. The article is essential for beginners in business studies as it lays a strong foundation for understanding the dynamics between vendors and suppliers.
This article provides a comprehensive understanding of the roles and interactions of vendors and suppliers in the business supply chain. It’s an excellent piece for those delving into business studies.
I wholeheartedly agree. The article’s elucidation on the functions and differences between vendors and suppliers is significantly enriching for interested readers.
Absolutely, the depth of explanations and the emphasis on the significance of vendors and suppliers in the business sphere make this an informative and enriching piece of content.