Supply Chain is the assemblage of all persons, entities, resources, processes and technologies which participate in the production and distribution of the goods and services, effectively to the final consumer. In the business world, we often hear the terms like vendors and suppliers, as they are the important links of the supply chain process. While vendor is someone who offers a product to customers for sale, who is the last link of the process economic production chain.
On the other hand, a supplier is a person or entity who is engaged in the business of providing goods and services who want it. It accounts for the first and foremost link of the supply chain process. Take a read of this article to know what makes these two business terms different.
Content: Vendor Vs Supplier
Comparison Chart
| Basis for Comparison | Vendor | Supplier |
|---|---|---|
| Meaning | Vendor is an individual or entity, who sells goods and services for a price to the customers. | Supplier is the one whose work is to provide the good or service required by the business. |
| Business Relationship | B2C | B2B |
| Supply chain link | Last | First |
| Objective | To sell the goods to the final consumer. | To make the goods available to the people who need it. |
| Purpose of sale | Use | Resale |
| Quantity provided | Small | Bulk |
Definition of Vendor
A Vendor is someone who purchases products from manufacturers or distributors and sells them to the customer. As the last person involved in the process of manufacturing and selling goods, they sell goods directly to the ultimate customer. So, they have frequent interaction with their clients and can maintain a good relationship with them.
Definition of Supplier
The supplier is defined as a business person or entity, who makes goods and services available to another entity. He provides goods and services, needed by the entities in carrying on business. As the supplier is the major source of inputs such as materials, tools, etc. in the business, he is an important link in the supply chain. He or she provides goods to manufacturers, in large quantities.
Key Differences Between Vendor and Supplier
The following points should be referred to know the difference between vendor and supplier:
- The person or entity, who sells goods or services in exchange for money to the customer, is called Vendor. The supplier is an individual or business entity, who is the source of products and services to the company.
- We use the term vendor, for business to consumer, sales relationship. On the other hand, when the sales relationship is business to business, we use the term supplier.
- Supply chain goes like this, Supplier>Manufacturer>Distributor>Vendor>Customer. So, the supplier is the first link of the supply chain whereas vendor is the second last person involved in the chain.
- Supplier aims at providing goods and services to the business entity who need it. As against this, vendor aims at selling the products to the ultimate consumer.
- Supplier sells goods to businesses for the purpose of resale. Conversely, Vendors sell goods to the customers for using purposes.
- In general, supplier supplies a specific type of goods to manufacturers in bulk quantities. Unlike vendor, who keeps a wide variety of goods and provides the end user in small lots.
Conclusion
Both supplier and vendor play the role of an intermediary in the supply chain. The major difference between vendor and supplier lies in the purpose of sale, i.e. when the goods are sold by the vendor to another party for the purpose of resale, a vendor will be called as a supplier. Likewise, when the supplier supplies goods directly to the final consumer, he is called as a vendor.
Khalid Othman says
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Khalid.
Mohammed Nizamuddin says
The Par Excellent explanation.
Eli Richardson says
It really helped when you talked about suppliers and vendors and their key differences.
pratibha says
Best explanation of vendor and supplier.