What is the difference between vendor and supplier?
Vendors and suppliers are common participants in the supplier chain. These two terms have a close similarity but they are quite different.
The main difference between vendor and supplier is that vendor is a person who sells goods to the final consumer whereas a supplier is a person who distributes goods and services to a recognized customer.
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The lesson provides a detailed insight into the core difference between vendor and supplier with a comparison table. Let’s dive into the topic.
What Is a Vendor?
A vendor is an individual or entity that offers products and services to customers at a price. They are responsible for selling goods and services to the final customer in the supply chain.
Vendors have close interaction with customers and they have the ability to maintain a good relationship as well as retain them for many years.
What Is a Supplier?
Supplier is an individual or entity who are responsible for providing goods and services to businesses to enhance their operation.
Suppliers are important links in the business since they provide goods in large quantities to manufacturers which support their existence.
Comparison Chart: Vendor Vs Supplier
| Basic Terms | Vendors | Suppliers |
| Meaning | Refers to individuals who sell goods and services to the final customer | Refers to individuals who supply goods and services to recognizable customers |
| Business Relationship | B2C | B2B |
| Supply chain link | Last | First |
| Relation to the Manufacturer | Indirect | Direct |
| Risk involved | Low | High |
| Objective | To sell the goods to the final consumer. | To make the goods available to the people who need it. |
| Purpose of sale | Consumption | Resale |
| Amount of Products | Small | Bulk |
| Clearance of account | Cleared within the fixed period base | Not cleared fully |
| Examples | Hotdog vendor | Software suppliers |
Core Difference Between Vendor and Supplier
- A vendor is the last person in the supply chain whereas the supplier is the first person in the supply chain.
- A vendor sells goods and services to the last user while the supplier is the middleman in supply chain
- Supplier distribute goods and services to business that are in need whereas a vendor is not involved in the distribution of products
- A vendor does not have a direct connection with the manufacturer whereas suppliers have a direct connection
- A vendor has a direct and close relationship with customers unlike suppliers
- The purpose of sale by vendors are for own consumption while the supplier is meant for resell
- Vendors deal in small quantities of goods whereas suppliers in large quantities of goods
- The risks involved by a vendor are minimal whereas that of a supplier are huge
- The main object of a vendor is to sell goods to the final user whereas suppliers to avail goods to the people who need it.
- The amount of capital needed to start for a vendor is small whereas that of supplier is huge
Read More: Difference between Wholesaler and Distributor
Comparison Video
Summary
The core difference between vendor and supplier is that a vendor is sale goods in smaller units to final customers whereas suppliers avail goods in large quantities to people who need it.
More Sources and References
- Vendor. Investopedia
- Source Procurement. Purchasing Center