A business, by definition, is a profitable or non-profitable company or organization that is engaged in many enterprises or professional activities. In business, there can be many terms and conditions often not understood by the general and some terms that are known by all.
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.
Vendors vs Suppliers
The main difference between Vendor and Supplier is that the vendors have direct business with the customers as they sell the products to them whereas the suppliers have an indirect relation with the customers and direct relation with the vendors. This is because the suppliers sell the products to the vendors.
A vendor is an individual or a company that offers the products for sale. 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 that 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 Between Vendor and Supplier
| 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 relation to the customers | They have an indirect relation to 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 selling the products | Creating the products |
What is a Vendor?
A vendor is an individual or the company that sells the products that meet with the requirements of the customer. They sell in small and required quantities to the consumers.
They have direct business with the customers and therefore have B2C business relation. Their main objective is to sell products that fulfil the customers’ desires.
They have lower risk rates as compared to wholesale because they can return all the products to the supplier. They buy the products in consignments and 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 have an indirect relation to the manufacturer if the suppliers are not the manufacturer.
What is a Supplier?
The suppliers are the people or company who create or sell the raw materials that are required for the products. This is supplied to the manufacturers directly unless they are directly the manufacturers.
It is because of the suppliers that a product that fulfils the costumers’ requirements enters the business market as they sell them to the vendors in bulks 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 relation between companies and supplier 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 in suppliers.
Main Differences Between Vendor and Supplier
- A vendor is an individual or a company that offers the sale of products produced by the manufacturers or supplied by a supplier. A supplier, on the other hand, is 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. Whereas, the supplier has an indirect relation 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 of the product or are the manufacturer, they sell the products in a bulk or large quantity. The vendors sell in small quantities.
- The vendors have a B2C relation in business as they have direct business with the customers. But, the suppliers have a B2B relation in business since they hold or link other business.
- The main aim of the vendors is to sell the products that are required by the customers. 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.
Conclusion
In business, we come across many terms for every step and process included. Two common terms are supplier and vendor. We come across them while talking about the supply chain. Though, they both refer to individuals or company that sells products to the consumers they are both different in other terms.
The vendor is the individual or the company who sells the products required by the consumers and purchased from the supplier. They have a B2C relation in business as they have direct business with the customers.
Suppliers are the individual or company who gets the raw materials for products required by the manufacturer or are the manufacturers. They have a B2B relation in business since they link two business and have an indirect relation to the consumers.
Though they are both working to fulfil the requirements of consumers, they have different roles to play. Vendors hold direct business with the customers as they sell the products required by them. Whereas the supplier holds indirect relation to the customers as they provide the raw materials for products required by the consumers.
References
- 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