Vendor vs. Supplier

The main difference between vendor and supplier is the connection to the consumer. A vendor is a person that supplies goods and services to the people directly while a supplier is a person or an organization that is responsible for providing the goods from the manufacturer to the vendor.

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vendor vs supplier

A supplier can be either a manufacturer or the one who has a direct link with the manufacturer that provides a product or service to another entity. A vendor is a person in the supply chain that is responsible for making goods and services available to the companies or consumers.

People are quite confused when they hear a word vendor or supplier as both are an integral part of the supply chain department who are involved in making goods available. However, we have taken some daily life examples of vendors and suppliers to clear the difference between these two.

Example 1

Inter wood manufactures high-end furniture but to make high-quality furniture that can be used for years they need pure raw material. In this case, a supplier is responsible for arranging the raw material and supplying it to Interwood’s production house.

Example 2

When a person goes to the mobile phone market to buy the phone, he is actually purchasing from the vendor while a supplier is a person who buys mobile phone from the manufacturers such as Samsung, Huawei, Oppo, Nokia, and others in bulk quantity and sells it to the vendors and retailers at wholesale prices.

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From both examples, it is concluded that a supplier is the first person in the supply chain who sells goods in bulk quantity to the businesses for resale.

Comparison Chart

 VendorSupplier
DefinitionA vendor is an individual or company that sells finished goods or services directly to the consumerA supplier is an entity  who supply raw material to the manufacturer or finished products to the vendor
Supply Chain LinkVendor is the last person in the chain who sell goods directly to the customerSupplier is the first person who connects the manufacturers to the vendors
Business TerminologyVendors are usually classified as B2C to indicate the person whose business is linked from the company to consumersSuppliers are usually classified as B2B to indicate the person whose business is linked with business to business
ObjectiveA vendor provides the goods to the final consumer or the one who sells the products directlyA supplier is a person that supplies the market with the products needed and demanded by the people
Aim of SaleA vendor purchase the finished products for selling purpose onlySuppliers purchase raw materials or goods to resell them
QuantitySmall selling scaleSuppliers are directly linked to manufacturers so the order supplied is usually in bulk
Relation to the ManufacturerVendors have an indirect relationship with manufacturers and are connected through suppliersManufacturers and suppliers are directly related to each other
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What is Vendor?

The term “vendor” comes from the French word vendre, meaning to sell.

Vendors are the part of the supply chain network that purchases products from manufacturers through suppliers or distributors to sell them to the customer. They are the last person involved in the supply chain who sells goods directly to the ultimate customer. A vendor is usually not directly connected to the manufacturer but are connected through a third party known as supplier, for example, the fruit seller selling fruits in the street is a vendor, a shopkeeper is a vendor that sells many products directly to customers, or if we go on to a larger scale Ali Express, Daraz, Amazon, etc. are the top-notch vendors that provide high-end goods to the customers.

What is Supplier?

The term supplier refers to the person or an organization that provides a product or service to other entities. The role of a supplier in a business is to provide high-quality products from a manufacturer at a good price to a distributor or vendor for resale.

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If a vendor sells the product for further resale, he may possibly not be called a vendor anymore because the one who sells the products for resale is called the supplier.

Suppliers are an integral part of supply chain that plays an important role during each stage of production. From supplying high-quality raw materials to the manufacturers to selling finished products to the vendors, a supplier in a business is someone who acts as a bridge between the manufacturer and vendor ensuring that communication is transparent and stock is of sufficient quality.

Suppliers are responsible to sell a huge pile of stock due to this, suppliers must be flexible and maintain strong relationships with vendors. At times, a supplier can be the manufacturer of the product as well as the distributor of the product but if a supplier alone cannot handle the workload of distribution; they outsource this task to another company.

Key Differences

  1. A person or company that sells goods or services to the vendor is known as supplier while the person or company that sells goods or services to the customers is known as vendor.
  2. The purpose of the supplier is to provide goods and services to the business entity that needs it while the purpose of the vendor is to sell the products to the ultimate customer.
  3. A supplier sells the product or services for the resale while a vendor cannot resell the product.
  4. The supplier is the first branch of the supply chain who can also be a manufacturer whereas the vendor is the second last branch involved in the chain.
  5. A supplier is responsible for supplying raw materials or goods in bulk quantities both to the manufacturers or vendors while the vendors selling scale is depends on the consumer demands.

Comparison Video

Conclusion

Both vendors and suppliers are an integral part of the supply chain. The main difference between these two groups is that one works more closely with the manufacturer for the purpose of resell while the other works closely with the consumer in exchange for money.

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