Vendor vs. Supplier: 7 Differences, Pros & Cons, Similarities

The supply chain is made up of all the people, places, things, processes, and technology that go into making and delivering goods and services to the final consumer.

We hear the words “vendor” and “supplier” a lot in the business world because they are important parts of the supply chain. A vendor sells a product to a client, but they are also the last link in the chain of economic production.

On the other hand, a supplier is a person or business that makes a living by giving goods and services to people who want them.

It is the first and most important part of the process of getting things from A to B. Read on to find out how these two business words are different.

Definition of Vendor

A vendor is someone who buys goods from manufacturers or wholesalers and then sells them to customers.

As the last person in the process of making and selling something, they sell it straight to the final buyer. Because of this, they talk to their clients a lot and may be able to maintain a good relationship with them.

Vendor vs. Supplier

Definition of Supplier

A supplier is a person or business that sells goods and services to another business. He gives companies the goods and services they need to run their businesses.

The supplier is a key part of the supply chain because he is the main source of materials, tools, and other inputs for the company. He or she sells a lot of things to manufacturers.

Comparison Table: Vendor and Supplier

ComponentsVendorSupplier
DefinitionThe vendor is the person who buys products from the manufacturer and sells them directly to the customer.A supplier is the one who works for both parties and supplies goods to the manufacturer and vendor.
Business RelationThe business relationship of the vendor is B2C which means it links the business with the customer.The supplier has a B2B relationship, which means it links the business to another business.
ObjectiveThe vendor’s objective is to provide goods or products to the last consumer.Supplier deals with the business and makes sure to supply the product that needs
Supply Chain LinkThe vendor is the last person who receives the product before it is delivered to a customer.A supplier is the first person who delivers products to the vendor
Relation with ManufacturerThe vendor has an indirect relationship with the manufacturer. Because it only takes products supplied by the supplierSuppliers have a direct relationship with the manufacturer and deal products with them.
Quantity ProvidedVendors provide a small number of products only on demandSupplier deals with bulk amount of products

Key Differences Between Vendor and Supplier

Consider the following to tell the difference between a vendor and a supplier:

  • A vendor is a person or business that sells goods or services to a customer in exchange for money. The supplier is an individual or business that gives the company goods and services.
  • We use the word “vendor” when a business sells to a consumer. But when a business sells to another business, we use the word “supplier.”
  • Here’s how the supply chain works: Supplier>Manufacturer>Distributor>Vendor>Customer. Because of this, the supplier is the first person in the supply chain, and the vendor is the last person involved.
  • The goal of the supplier is to get goods and services to the companies that need them.
  • On the other hand, the goal of the vendor is to sell the goods to the final customer.
  • The supplier sells items to businesses that will sell them again. On the other hand, vendors sell things to customers that they can use.
  • Most of the time, a supplier gives a manufacturer a lot of a certain kind of product.
  • Unlike the vendor, who has a lot of different things in stock and sells them to the end user in small groups

Vendor vs. Customer and Distributor

The ideas of vendor and client are polar opposites. In the game Vendor vs. Customer, the “vendor” is the person who buys things from “suppliers” and then sells them to “customers.” The client is the person who buys the goods or services from the vendor.

When it comes to the difference between a vendor and a distributor, the distributor buys the products from the manufacturer and gives them to the vendor. The final customer then buys these things from the vendors.

Vendor vs. Supplier Similarities

  • Both are critical components of the supply chain cycle.
  • Both can help the company be successful.
  • The items or goods are linked to both the supplier and the seller.

Vendor vs Supplier Example

Example Of Vendor

Think about the following situation: unit A makes finished products, which it then sells to wholesaler B. Then, B sells these things to shops C and D, which sell them to customers. Customers could be either people or businesses.

In this case, A becomes the vendor for B, while B becomes the vendor for C and D. In the same way, C and D are vendors for their customers.

Example of Supplier

Think about a situation in which the demand for a certain soap suddenly goes up. It meant that all of the soaps were gone in a matter of days, despite the fact that there should have been enough for a month based on previous sales.So, the production unit, which had just ordered raw materials, got orders from vendors.

Because they had worked with the company for a long time, suppliers did their best to provide the important supplies that were needed. Because they worked together, the product came out sooner than planned.

It’s how a good relationship between a manufacturer and a supplier could save the day when demand suddenly goes up.

Vendor vs. Supplier Pros and Cons

Vendor Pros and Cons

Pros of Vendor

  • The good relationships that vendors have with their customers can help the business.
  • Vendors face fewer dangers. When we compare vendors to suppliers, it’s because vendors have to deal with fewer products at once.

Vendor vs. Supplier

Cons of Vendor

  • When the vendor is from outside the company, it can be hard to believe in their skills.
  • Most businesses are wary of giving out personal information about their customers.
  • If the vendor doesn’t provide his service on time or doesn’t handle things well. It could make the customer less likely to trust you.

Supplier Pros and Cons

Pros of Supplier

  • Suppliers help the company get the goods or services it needs to give to clients. If the company doesn’t have a provider, it won’t be able to offer its own services to customers.
  • Suppliers can take care of a wide range of goods that the organization can’t easily get.
  • When businesses buy things in large quantities, they can try to get a better price.

Cons of Supplier

  • Being a supplier is risky because they have to deal with a lot of different things at once.
  • If a business has a contract with one supplier, it might not be able to get service from a cheaper one.
  • Prices are high because there aren’t as many specialized providers.

Vendor vs. Supplier

Vendor vs. Supplier FAQs

Are Vendors and Suppliers the Same Thing?

No, a supplier is a business relationship between two businesses, while a vendor is a business relationship between a business and a customer.

Is Vendor a Supplier or a Customer?

A vendor is just someone who buys things from a supplier and sells them to a client.

Is a Manufacturer a Vendor?

The manufacturer is the person who turns raw materials into things that can be sold, and the vendor is the person who sells those things.

What Is the Opposite of Vendor?

The consumer, who will buy the goods, is the exact opposite of the seller.

What Are the Types of Vendors?

There are three different kinds of vendors:

  1. B2C – who sells from business to consumer
  2. B2G – who sells from business to government
  3. B2B – who sells from business to other vendors

Conclusion

Whether you say “supplier” or “vendor,” both terms are used in the context of the supply chain. But when it comes to suppliers vs. vendors, suppliers do business with other businesses, while vendors do business with customers.

The supplier gets the goods from the manufacturer and gives them to the vendor. The product goes straight from the provider to the customer. The seller gets the item last, before the buyer does.

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