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Difference between Vendor and Supplier
The networks of all the businesses, people, actions, resources, and technological advancements involved in producing and distributing a good or service, from the delivery of raw materials to the eventual delivery of the finished good to the customer, are known as supply chains. To name a few benefits, supply chains increase customer service, lower operating costs, strengthen business financial positions, offer job possibilities, and lay the groundwork for economic growth. The phrases vendors and suppliers are frequently used in business transactions and dealings since they are crucial to every economic activity.
Vendor and supplier are used interchangeably when discussing supply chain roles and duties. They supply goods and services, but specific attributes make each one a different term in the supply chain world.
It should go something like this when you think of a supply chain − Supplier > Manufacturer > Distributor > Vendor > Customer. As a result, the vendor is the ultimate link in the supply chain, whereas the supplier is the first. However, they arrive, you should try to choose reputable suppliers and vendors as part of your growth strategy and establish a good relationship; otherwise, you will regret it.
Who is a Vendor?
An individual who purchases and distributes products from producers to consumers is known as a vendor. Since they are the supply chain's last link, they frequently connect with customers. Because of this, manufacturers consult the suppliers when conducting market research.
The vendor is not needed to be a manufacturer and does not need to produce their items. Instead, a vendor can resell things they obtained from another vendor and mark up their price accordingly. Restaurants and stores are companies that sell products directly to customers and are regarded as vendors.
There are four different types of vendors in the supply chain, and they all perform separate roles.
Manufacturer − A manufacturer creates a product out of raw ingredients. They offer vast amounts of that goods for sale to wholesalers, directly to a retailer, or the final consumer. The first phase in the supply chain is frequently manufacturing.
Retailer − A retailer is a reseller who offers goods for sale in a physical store or online. These goods can be anything from clothing to office supplies to hot dogs sold by street vendors. They concentrate on acquiring goods from other sellers, typically wholesalers, and reselling them to customers.
Service provider − A service provider provides services like labor or upkeep. Examples include consultancy, janitorial, IT, air conditioning repair, building maintenance, and financial services.
Wholesaler − Wholesalers handle the product's acquisition by acquiring it from a producer or another wholesaler. Then they take on the role of a middleman, reselling the products to a retailer, a distributor, a different customer, or a person with a business account.
Who is a Supplier?
This person or organization provides goods and services to another organization. Given that he serves as the primary input source, a supplier plays a crucial role in the supply chain. A supplier can also provide producers with significant volumes of commodities. A supplier thus serves as a middleman between the consumer and the manufacturer and receives commissions from both parties.
Suppliers play a crucial role at every stage of the product life cycle. The time it takes for a product to develop and enter the market is referred to here as the product life cycle. The product life cycle may be lengthy or brief, depending on the company's volume. Still, there is no doubt that businesses require good and reliable suppliers to obtain the best possible products. So, standing your ground with your suppliers is crucial.
In any firm, the supplier's job might be unpredictable and demanding. One reason is that manufacturers and retailers demand a certain quality and quantity of services in connection with selling their goods and services.
Difference between Vendor and Supplier
The following table highlights the major differences between a Vendor and a Supplier −
Characteristics | Vendor | Supplier |
|---|---|---|
Definition | Someone who deals with the
purchase and distribution of goods
from the manufacturers to the
consumers. | A person or entity that makes
goods and services available to
another person or entity. |
Quantity of
product | Sells a few products over time. | Directly deals with items in bulk,
thus benefiting the manufacturer. |
Objective | The objective is to sell the goods
to the final consumer. | The objective is to make goods
available to those who need them. |
Business relations | The market relation is B2C,
meaning a vendor directly
associates with the business consumer. | The market relation is B2B which
means it relates from one business
to another. |
Supply chain link | Vendors are the last person that
sells the product to the consumer. | Suppliers are the first person who
take the product to the vendors. |
Relation to the
manufacturer | Have an indirect relationship with
the manufacturers. | Have a direct relationship with
the manufacturers. |
Relation to
consumer | Close to the consumer as a vendor
directly sells to the consumer. | Suppliers are distant from the
end-consumer. |
Risk involved | The risk is less as goods are
brought on a demand basis by the
consumer. | The risk associated with being a
supplier is more as they deal with
products in bulk. |
Conclusion
Suppliers and vendors both function as middlemen in the supply chain. The primary distinction between a vendor and a supplier is the reason for the sale; when a vendor sells items to a third-party to resell them, they are referred to as suppliers. The supplier is referred to as a vendor when delivering items directly to the customer. Because both serve as a link in the supply chain, the economy cannot prosper without them.
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