Vendors and suppliers are both applicable to a business, and there are many similarities between them, but they are also important in different ways. Are you confused between vendor and supplier? Are they the same thing, or are they two different terms with different meanings? This article will provide a complete difference between vendor and supplier so that you can make an informed decision. We will also discuss the various aspects of each term so that you can understand their role in the supply chain. So read on to learn more!
Who Is A Vendor?
A vendor in supply chain management is the person or entity who purchases the products and services in small quantity from the distributors and manufacturers and sell them directly to the customers. The vendor comes at the last phase of the manufacturing process. They have a direct link with clients and can build strong customer relationships.
Who Is A Supplier?
A supplier is a person or entity in supply chain management responsible for providing services or products to another entity in large quantities. The supplier is the essential resource and has a direct link in the supply chain. They provide the vital resources, e.g., tools, and machines, to other entities for carrying out business operations. Contact Mexico Supplier Quality Engineers to get support throughout the entire manufacturing life cycle.
Vendor Vs. Supplier - A Brief Breakdown
Supplier> Manufacturer > Distributor > Vendor > Customer
After conducting research, here we provide a clear, concise, and easily digestible list of fundamental points that set vendors and suppliers apart.
|Meaning||An entity who sell products directly to customers and purchase them from manufacturers or distributors in market.||An entity who porvodies products to other entities for carrying business operations.|
|Link With Supply Chain||At the last point||First point|
|Purpose of sale||Use||Resale|
|Objective||To sell products and services directly to the customers.||To make services and goods available to the people who need it.|
|Quantity||Small quantity||Large quantity|
Key Differences Between Vendor Versus Supplier
These two terms are clearly different. However, people often use them interchangeably. The following are some key differences between vendors and suppliers that will help you avoid this confusion:
- Supplier is person or bunnies entity or any oragzation that provides services to another entity on the large scale. While Vendor is any organztion that sells services or products directly to the client.
- Supplier refers to a business-to-business relationship, while vendor refers to a business-to-customer relationship.
- The objective of vendors is to sell the products while suppliers aims to provides the products to those who need it.
- Suppliers supplies good to the manufacturers in large quantity. While vendors purchase goods from manufacturers in large quantity and sell them to customers in small amount. You may also learn the difference between Six Sigma vs Lean.
Frequently Asked Questions About Vendors And Suppliers Differences
1. Is a vendor also a supplier?
A vendor refers to an individual or entity purchasing products from manufacturers and then selling them directly to customers. By contrast, a supplier is a person or business that provides raw materials, parts, and machines to manufacturing units. Both of them play a significant role in supply chain management (SCM).
2. What is the difference between vendor management and supplier management?
While Vendor Management is focused on price comparisons and contract negotiations, supplier management is focused around how the suppliers' influence the life of the enterprise. As a company considers their supplier relationships, they should look on their suppliers as partners.
3. What is an example of a vendor?
An example of a vendor is a company that provides inventory for boutique clothing stores. A store places an order with the company, detailing what products it wants as well as how many of each product. The company then sources the requested items from the manufacturer and delivers them to the store.
4. Is supplier or vendor better?
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.
The Bottom Line
Vendors and suppliers are two different entities in supply chain management. But both have an essential role. Thus, business owners should have a clear picture of their differences. We hope you enjoyed reading this article.
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The thing to keep in mind is that supplier management isn't just about managing your suppliers. It's a long-term relationship that needs continuous attention and care.
At AmrepMexico, we offer customer-centric solutions like supplier management services and longer-term relationships with reliable suppliers. Call us today and schedule a consultation session if you plan to turn over the new supplier management responsibilities to someone else.