Vendor definition
/What is a Vendor?
A vendor is a purveyor of goods or services. All of the entities in a supply chain that leads up to the final delivery of goods or services to a customer are considered vendors. They typically operate under contracts with their customers, which state the terms of service, pricing, payment terms, and delivery schedules under which deliveries will be made and services provided.
A vendor may be classified as selling business-to-business (B2B), or as business-to-consumers (B2C), or as business-to-government (B2G), depending on the type of goods or services that it offers.
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Types of Vendors
There are many types of vendors, of which the most common are as follows:
Manufacturers. Vendors that produce goods from raw materials and sell them directly or through intermediaries (e.g., electronics manufacturers).
Wholesalers. Vendors that purchase large quantities from manufacturers and resell them to retailers or other businesses at a markup.
Retailers. Vendors that sell products directly to end consumers, often in smaller quantities (e.g., grocery stores, online shops).
Distributors. Vendors that act as intermediaries between manufacturers and resellers, often providing logistics and support services.
Service providers. Vendors that offer intangible services rather than physical goods, such as accounting firms, marketing agencies, or IT consultants.
Independent contractors. Individuals or small businesses that provide specialized, contract-based services like graphic design, software development, or repair work.
Consultants. Vendors offering expert advice or analysis in fields such as management, finance, or compliance.
Freelancers. Self-employed individuals who offer creative or professional services on a project basis (e.g., writers, photographers, translators).
Raw material suppliers. Vendors that provide the basic materials used in manufacturing processes (e.g., lumber, steel, chemicals).
Value-added resellers. Vendors that add features or services to an existing product and resell it (e.g., bundling software with hardware support).
Drop shippers. Vendors who fulfill orders on behalf of a retailer, shipping products directly to the customer without storing inventory.
Temporary staffing agencies. Vendors that supply short-term personnel to fill staffing needs in various industries.