Vendor

In a supply chain, a vendor, supplier, provider or a seller, is an enterprise that contributes goods or services. Generally, a supply chain vendor manufactures inventory/stock items and sells them to the next link in the chain. Today, these terms refer to a supplier of any goods or service. In property sales, the vendor is the name given to the seller of the property.

## Contents

* 1 Description
* 2 Types
* 3 Vendor selection
* 4 Vendor de-listing
* 5 Property sales
* 6 See also
* 7 References

## Description

A vendor is a supply chain management term that means anyone who provides goods or services of experience to another entity. Vendors may sell B2B (business-to-business; i.e., to other companies), B2C (business to consumers or direct-to-consumer), or B2G (business to government). Some vendors manufacture inventoriable items and then sell those items to customers, while other vendors offer services or experiences. The term vendor and the term supplier are often used indifferently. One distinction which might be made is that the vendors sell the goods or services while the supplier provides the goods or services.[1] In most business contexts, except retail, this difference has no impact and words are interchangeable.[2]

A well-established explanation of the term "preferred supplier", coming from the Chartered Institute of Procurement & Supply, refers to "contractors or sellers that provide favourable trading terms or items that are highly desirable to a business".[3] The contrasting term "residual supplier" applies to a country that supplies the world market only after importers have met their initial needs from preferred suppliers. A residual supplier is not initially competitive because of higher prices or lower quality.[4]

Typically vendors are tracked in either a finance system or a warehouse management system.

Vendors are often managed with a vendor compliance checklist or vendor quality audits, and these activities can be effectively managed by software tools.[citation needed]

Purchase orders are usually used as a contractual agreement with vendors to buy goods or services.

Vendors may or may not function as distributors or manufacturers of goods. If vendors are also manufacturers, they may either build to stock or build to order.

"Vendor" is often a generic term, used for suppliers of industries from retail sales to manufacturers to city organizations. The term generally applies only to the immediate seller, or the organization that is paid for the goods, rather than to the original manufacturer or the organization performing the service if it is different from the immediate supplier.[5]

## Types

There are four basic sorts of vendors in the supply chain, and the companies and business owners play diverse responsibilities.[6]

Manufacturers: raw materials are transformed in a series of steps into finished goods by manufacturers.

Retailers: A retailer is a reseller who sells things in a store or online, such as apparel or office supplies. The term may include street vendors selling hot dogs, and so on. In a retail context, those companies who provide goods for the retailer to sell may be referred to as their suppliers.[7]

A Service Provider provides a service, such as maintenance or labour, to customers. Examples include consulting and janitorial services.

A Wholesaler sources products from manufacturers and resells them to retail establishments, distributors, and other buyers. They serve as a crucial intermediary in the supply chain, offering competitive pricing and convenient purchasing options.

There must be a vendor relationship with a supplier if a small firm or a major organization wants to resell a product. Vendor registration entails several steps in the process, including completing a credit application, placing a company credit card on file for payments, giving them your company phone number, and establishing payment terms.

A further distinction is sometimes made between domestic and international or foreign suppliers, e.g. in the United States, Buy American rulings refer to "domestic suppliers".[8] Foreign supplies may retain contacts in countries in which they wish to develop sales: Robi Bendorf notes that the sales contacts of foreign suppliers covering the United States "exist in all traditional supplier forms including sales representatives, agents, distributors, importers, direct sales offices, trading companies [and] brokers".[9]

In the automotive industry, a "directed-buy" supplier is a component supplier whose use by vendors is mandated by the client.[10]

## Vendor selection

Selection of vendors or suppliers is a key function within a procurement organization. Baily et al. refer to a number of information sources typically used by buyers to help them select suppliers, including suppliers' reputation, their own supplier evaluation processes, records of suppliers used previously, and approved lists of suppliers.[11]

## Vendor de-listing

De-listing refers to withdrawal of a supplier or their products from a company's supply chain. The UK's Groceries Supply Code of Practice also includes "significant" reductions in volumes purchased and supplied within its definition of "de-listing",[12] and sets out good practice to be followed when de-listing occurs. At the Groceries Code Adjudicator's annual conference with suppliers and retailers in 2024 detailed discussions took place about best practice and "fair and reasonable timeframe[s]" for issuing and implementing de-listing notifications.[13]

## Property sales

In property sales, the vendor is the name given to the seller of a property, while the buyer is referred to as the "purchaser".[14][15]

## See also

* Peddling
* Retailer
* Wholesaler

## References

1. ↑ Oxford Advanced Learner's Dictionary, Vendor, accessed on 8 September 2024
2. ↑ "Beyond Luxury Retail: Why Most Industries Use Vendor and Supplier Interchangeably". https://www.bspk.com/post/beyond-luxury-retail-why-most-industries-use-vendor-and-supplier-interchangeably.
3. ↑ Chartered Institute of Procurement & Supply, Glossary of Procurement and Supply Chain Terms, accessed on 20 March 2026
4. ↑ Congressional Research Service, Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition, Updated June 16, 2005, archived on 11 February 2006, accessed on 22 March 2026
5. ↑ Skjott-Larsen, Tage; Philip B. Schary; Juliana H. Mikkola; Herbert Kotzab (2007). Managing the Global Supply Chain. Copenhagen Business School Press DK. pp. 20. ISBN 978-87-630-0171-7.
6. ↑ "Difference Between Vendor and Distributor". Diffzy.com. https://www.diffzy.com/article/difference-between-vendor-and-distributor-66.
7. ↑ Groceries Code Adjudicator, About us, accessed on 15 October 2024
8. ↑ Eisenhower, D. D., Executive Order 10582: Prescribing Uniform Procedures for Certain Determinations Under the Buy-American Act, section 3, published on 21 December 1954, accessed on 24 March 2025
9. ↑ Bendorf, R., Approaches to International Sourcing, Bendorf Associates, based on a feature article in the September 1998 issue of Purchasing Today, archived on 5 December 2019, accessed on 24 March 2025
10. ↑ Kowalczyk, D., Directed-Buy Supplier – How to cooperate with a subsupplier chosen by the Client, Automotive Quality Solutions, accessed on 12 October 2025
11. ↑ Baily, P., Farmer, D., Jessop, D. and Jones, D. (1998), Purchasing Principles and Management, 8th edition, London: Pitman Publishing, pp. 146-147, quoted by Bell, S., in Established Buying Theory, archived on 18 December 2007, accessed on 6 September 2024
12. ↑ UK Government, Groceries Supply Code of Practice, published on 4 August 2009, accessed on 15 October 2024
13. ↑ Belser, T., Groceries Code Adjudicator Conference 2024: Suppliers Should Find Their Voice (and Do GSCOP Training), Haddleton & Co Ltd., published on 29 October 2024, accessed on 31 October 2024
14. ↑ "Who is the Vendor in a House Sale?". tulia group. https://www.tlw.com/news/view-256.html.
15. ↑ "Finance Act 2003". of 10 July 2003. 43. https://www.legislation.gov.uk/ukpga/2003/14/section/43. Retrieved 6 September 2024. "The "purchaser" and "vendor", in relation to a land transaction, are ... the person acquiring and the person disposing of the subject-matter of the transaction" of 10+July+2003&rft.pages=43&rft_id=https://www.legislation.gov.uk/ukpga/2003/14/section/43&rfr_id=info:sid/en.wikibooks.org:Social:Vendor">

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