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    Definitions 3 min read
    Icon represents a vendor relationship.
    SOURCE: noomtah for

    A vendor is an individual or organization that sells goods or services to another individual or organization through a stable economic supply distribution system or chain. Vendors are typically saddled with the responsibility of ensuring that raw materials get to the producers and finished goods to the final consumers. Vendors are available in all businesses and professions like finance, investments, engineering, technology, etc.


    What are the key features of vendors?

    Vendors are resilient and want their goods or services to be at the forefront of the market. Features of vendors include:

    • Customer relationship: Vendors prioritize good customer relationships to build a loyal contact base.
    • Quick help: Vendors can offer assistance to customers having issues with their products or services.
    • Competition: Vendors in similar industries compete with each other. Such competition brings about improved products and service delivery.
    •  Licensed sellers: Vendors, especially those involved in the exportation of products, are usually licensed by a country’s licensing agency. Others that sell within their country of origin are normally registered under the trade organization of the country.

    Types of Vendors

    There are three primary types of vendors in the economic distribution supply chain:

    • B2G (Business to Government) vendors: B2G vendors sell their products or services directly to local, state, or federal governments. These vendors may be contacted on a short-term or long-term basis based on competitive pricing and past performance.
    • B2C (Business to Consumer) vendors: These vendors sell their products or services directly to end consumers. 
    • B2B (Business to Business) vendors: A B2B vendor supplies its products or services to other businesses. 

    Examples of vendors

    Most retail shops that sell finished products such as consumer electronics, dresses, body products, etc., fall under B2C vendors. Many online stores like Amazon, Walmart, eBay, etc., are considered B2C vendors.

    Examples of a B2G vendor are Raytheon and Lockheed Martin, which provide military systems to the governments of the US and other countries. 

    Finally, Intel functions as a B2B vendor that sells its components to the producers of personal computers.

    Who uses vendors, and what do they use them for?

    Manufacturers use B2B vendors to get raw materials, parts, and subassemblies that will be transformed into finished products. Governments get products from trusted B2G vendors and use them for improved governmental administration by channeling them into different government parastatals.

    How do vendors work?

    Vendors buy raw materials or finished products from manufacturers and put them up for sale using the predominant supply chain. Individuals or companies can buy through direct purchases or indirectly through a third party. Most vendors are registered with organizations that utilize Customer Relationship Management (CRM). Sometimes, the CRM may require that the vendor and purchaser sign a Master Purchasing Agreement.

    Benefits of using vendors

    Vendors help organizations reduce the stress, risks, and financial burden accompanying sales of their products (e.g., online vendors such as eBay, Amazon, Aliexpress, etc.). They make such products available to many buyers and communicate any difficulties the buyer experiences back to the manufacturing company. Besides this, companies that use vendors have ample time to focus on their production business and hasten quick delivery of such products.