Vendor vs. Supplier: What is the difference between Vendor and Supplier?

Do you know the difference between a vendor and a supplier? Learn the differences between these two business terms and when to use each term. Read more here.
Vendor vs Supplier: 6 Key Differences, Pros & Cons, Similarities

In the business world, we often hear vendor and supplier terms. Both terms are essential links in the supply chain process. The Supply Chain process is basically an assembling of all the persons, resources, technologies, and processes that take part in the production and distribution of goods to consumers. The suppliers and vendors play the role of intermediaries in this supply chain. The main difference between suppliers and vendors is in the way they sell. The supplier is engaged in the business, which provides goods, while the vendor directly links with the consumer and supplies the product.

Let’s take a closer look at Vendor vs. Supplier

Role Both play an important role as intermediaries in the supply chain
RiskBeing a supplier is riskier than being a vendor, as the supplier deals with products in bulk.
Consumer RelationThe vendor is more close to the consumer as compared to a supplier
Product QuantityA vendor sells a few products on-demand while the supplier deals with bulk items.

Table of Contents

Who is the Vendor?

Who is the Vendor? A vendor is a person who purchases the products from the manufacturer and sells those to the customer. The vendor is the last and final person in the supply chain who has a direct link with the customer. Vendors have frequent interactions with their clients to keep up a good relationship with them. That's why manufacturers choose vendors for the market survey.

A vendor is a person who purchases the products from the manufacturer and sells those to the customer. The vendor is the last and final person in the supply chain who has a direct link with the customer. Vendors have frequent interactions with their clients to keep up a good relationship with them. That’s why manufacturers choose vendors for the market survey.

Who is the Supplier?

Who is the Supplier? A supplier is a person who is involved in the business of production and distribution. Suppliers are a major source of input. That's why it plays an important role in the supply chain. A supplier can also provide a large number of goods to the manufacturer. So, a supplier works as a middleman between manufacturer and customer and gets the commission from both parties.

A supplier is a person who is involved in the business of production and distribution. Suppliers are a major source of input. That’s why it plays an important role in the supply chain. A supplier can also provide a large number of goods to the manufacturer. So, a supplier works as a middleman between manufacturer and customer and gets the commission from both parties.

6 Key Differences Between 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 

Vendor vs. Customer and Distributor

Vendor and customer are two opposite terms. In Vendor Vs. customer, the vendor is the person who takes the products from suppliers and sells these to the person who demands. While the customer is the person who pays for the product or services delivered by the vendor. And if we talk about Vendor Vs. Distributor, the distributor gives the products to the vendor by taking these from the manufacturer. And vendors resell those products to the last consumer.

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Vendor vs. Supplier Similarities

  • The suppliers and vendors play an essential role in the supply chain cycle.
  • Both can provide their services to the company.
  • Whether its supplier or vendor both are linked with the products or goods.

Vendor vs. Supplier Pros and Cons

Vendor Pros and Cons

Vendor Pros and Cons

Pros of Vendor

  • Vendors have great relationships with customers, which can benefit the business.
  • Vendors have fewer risks if we talk about vendors vs. Suppliers, that’s because vendors have to deal with fewer products at one time.

Cons of Vendor

  • Sometimes it becomes difficult to trust the vendor’s ability, especially when it’s an outsider. Most companies are afraid of handing over the personal data of customers.
  • If the vendor cannot provide his service on time or doesn’t handle things well. It can damage the customer’s trust.
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Supplier Pros and Cons

Supplier Pros and Cons

Pros of Supplier

  • Suppliers help the company to provide its goods or services to the customers. Without a supplier, the company won’t be able to offer its own services to customers.
  • Suppliers can deal with many products that cannot be easily sourced by the company.
  • Businesses have a chance to negotiate the price when buying the products in bulk.

Cons of Supplier

  • Being a supplier is risky because suppliers have to deal with the bulk of products at once.
  • If a company is tied in a contract with one supplier, it may not be able to get service from a cheaper supplier.
  • There are fewer specialized suppliers available, so the prices are high.

Comparison Chart

Do you know the difference between a vendor and a supplier? Learn the differences between these two business terms and when to use each term. Read more here.

Comparison Video

Vendor vs Supplier Difference Explained | Supplier & Vendor

Vendor vs. Supplier FAQs

Are Vendors and Suppliers the Same Thing?

No, the supplier belongs to B2B business relation, which deals business to business, while vendors in B2C business deal from business to customer.

Is Vendor a Supplier or a Customer?

A vendor is only an individual who buys products from a supplier and sells it to the customer.

Is a Manufacturer a Vendor?

The manufacturer is the person who transforms the raw material into a product for selling purposes, and the vendor is the one who sells those products.

What Is the Opposite of Vendor?

The opposite of the vendor is the customer who will buy the products.

What Are the Types of Vendors?

There are three types 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 it’s supplier or vendor, both the terms are used in the context of the supply chain process. But if we talk about suppliers Vs. Vendors, the suppliers are the ones who deal with business to business, while the vendors deal with business to customer. The supplier gets the products from the manufacturer and sends them to the vendor. The vendor is directly linked to the customer and delivers the product. The vendor is the last one who receives the product before the customer.

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