Difference Between Vendor and Supplier
Table of Contents
The difference between a vendor and a supplier exists in their roles and responsibilities. Vendor and supplier in a supply chain are words that are encountered in the world today, and it is natural to see the words being used interchangeably to refer to a person who supplies goods or services to an organization. A supplier may be the manufacturer of goods, while a vendor is rarely a manufacturer. Whatever their differences may be, it is common to see people confusing between vendors and suppliers because of many similarities between their roles. This article attempts to highlight the differences between a vendor and a supplier based upon their roles and responsibilities.
Who is a Vendor?
A vendor is one who vends products to customers and thereby maintains a close relationship with the customers. He or she is the last person involved in the supply chain that obtains goods on a consignment basis from the supplier or the manufacturer and sells them to the clients. A vendor, when returning certain products, clears his account when paying for the products that have been sold while retaining his commission or profit percentage as has been fixed beforehand.
Who is a Supplier?
A supplier is the person who supplies goods or services to a company or a person and is, in most instances, also the manufacturer. A supplier may also be a vendor in certain cases, where the supplier directly supplies goods to the client. He or she is often a middleman functioning between the manufacturer and the customer, deriving his commission from both the parties at the selling of the products.
What is the difference between Vendor and Supplier?
Definitions of Vendor and Supplier:
| Vendor | A vendor sells the goods to the consumer and is the last person involved in the supply chain. |
| Supplier | A supplier is mostly a middleman who supplies goods or services to the vendor. |
Vendor vs. Supplier
Role Mix:
| Vendor | A vendor is rarely a supplier of goods or services. |
| Supplier | A supplier is also a vendor in certain cases, where he or she supplies certain goods or services direct to the consumer. |
Access to Products:
| Vendor | A vendor is rarely a manufacturer and gets products on a consignment basis from the manufacturers. |
| Supplier | A supplier, in most instances is also the manufacturer, but sometimes he procures products from the manufacturer and sells to retailers. |
Relationship to Consumer:
| Vendor | A vendor is more close to the end consumer than a supplier as he is the last person involved in the supply chain. |
| Supplier | A supplier is at a distant to the end consumer as his presence is felt earlier in the supply chain. |
Usage of the Terms:
| Vendor | Vendor is a generic term that can be applied to anybody supplying goods and services. |
| Supplier | You cannot apply the term supplier to just anyone. |
Risk:
| Vendor | The risk of being a vendor is less as he buys the goods on a consignment basis from the supplier and obtains a commission by selling the items. He can return the unsold items to the supplier. |
| Supplier | The risk of being a supplier or a manufacturer is more compared to a vendor. |
Though a vendor and a supplier may be the same in certain contexts, it can be stated that a vendor is the closest and the last link in the supply chain whereas the supplier is mostly a middleman who obtains goods or services from the manufacturer to supply them to the vendor.
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