Almost all businesses buy inventory or supplies from other companies. Not all businesses sell inventory or supplies to other companies. Some companies like retailers sell products directly to the public. Companies that do sell supplies or inventory to other companies are typically called vendors. A vendor is a party in the supply chain that makes goods and services available to companies or consumers. The term "vendor" is typically used to describe the entity that is paid for goods that are provided, rather than the manufacturer of the goods itself. However, it is possible for a vendor to operate as both a supplier (or seller) of goods and a manufacturer.
In a nutshell :
- A vendor is a general term used to describe any supplier of goods or services.
- A vendor sells products or services to another company or individual.
- Large retailers, like Target, rely on many different vendors to supply products, which it buys at wholesale prices and sells at higher retail prices.
- A manufacturer that turns raw materials into a finished good is a vendor to retailers or wholesalers.
- Some vendors, like food trucks, sell directly to customers.