A vendor is someone who purchases and resells goods and services in the market. As the body is made up of different components and each component is useful in its way and has its importance in the functioning of the body, similarly market comprises different components and vendor is one of the most important components of the market which helps in the smooth functioning of the market.
Vendors buy products from the one who distributes and sell those products to those who consume them. There are different types of vendors such as manufacturers, retail shop owners, wholesale sellers, service providers, independent vendors, and many more. The role of the vendor is very important to confirm that the market is running smoothly and all the products are available in the market.
How do Vendors work?
Vendors are generally those people who act as a mediator between the supplier and the consumer. Vendors buy goods and services and sell them to consumers. The vendor’s services also depend on the type of company and the nature of its business.
Steps for vendors working:
- At first, the consumer makes an order to purchase a particular product. The order placed contains all the information regarding the product, mode of payment, date and time of delivery, and terms & conditions.
- Then the seller or vendor gets the product and delivers it to the consumer.
- At the time of delivery, the consumer gets an invoice which acts as proof that the consumer has bought an authentic product from a particular vendor and thoroughly checks the product.
- And at last, the consumer makes the payment after confirmation of the product.
Importance of Vendors:
Management of cost
The vendor acts as a medium between the consumer and the producer. They bargain with the producers for the product and deliver products at a cheaper price and manage the cost.
Availability of Product
Vendors make the product available at a bearable price in the market without any problem.
Maximizing Consumer Satisfaction
Vendors supply products that meet the quality standards of the consumer and maximize the satisfaction level of the consumers.
Types of Vendors:
Manufacturers are the ones who purchase the raw materials and turn them into the final product that is used by the consumers to satisfy their needs and maximize the utility of the consumption of the product. The manufacturers sell their products to the retail shop owners or the wholesale sellers which at last is used by the consumers as the final consumption of the product.
The Wholesale Sellers
The wholesale sellers purchase the products from the manufacturers and resell the theme to the retail store owners. They negotiate the most from the manufacturers to get the products at the cheapest price possible and sell that to the retail shop owners keeping some sort of margin from the price at which they buy the product and then the margin becomes the profit of the wholesale vendors. The wholesale sellers purchase the products from different manufacturers and distribute products in a wide area. They make connections with different companies and retailers.
The Retail Shop Owners
Retail shop owners get the products from the wholesale sellers and resell them in the market to the final consumers for the end consumption of the product. Retail shop owners negotiate with the wholesale sellers to get a good margin between the price at which they buy the product and resell that for final consumption and that turns into their profit of the product. The consumers easily get the product from the retail shops and become the final consumer. Retail shops are one of the most important components of the market.
Independent vendors are those who sell their products directly to the consumers for the final consumption of the product. It could be anyone from some company or trade show representative selling their products directly to the consumers. This removes the middlemen from the business and reduces the cost to a much greater extent. But also the independent vendors reduce the employment opportunities of certain middlemen leaving them without work.
The service provider vendor directly works for the organization to provide their services for the upgradation of the company or the organization. Also, the service providers give their services to the people and charge money for that. The service providers give their services for the company to another party. The agreement for service providing is done based on the service agreement.
There are also different types of vendors based on clients:
Business to Business(B2B)
In business-to-business vendors, the goods and services are provided from one manufacturer to another manufacturer for business purposes. The raw materials from one manufacturer are sold to another manufacturer for the production of goods and services.
Business to Government(B2G)
In this, the businesses directly supply the products to the government for the final consumption or rather a further production of goods and services. People need to get tenders from the government to provide them with authentic products.
Business to Consumer(B2C)
In this, the manufacturers directly sell their products to the consumers for the final consumption of goods and services. This removes all the middlemen from the business.
Examples of vendors
- Small online businesses make allies with prominent vendors and sell their products in the market through them. Flipkart and Amazon are one of the best examples of this.
- The different companies produce small products like chips or some other nanoproducts such as the TSMC produces chips for apple and even apple uses some of the nano products produced by Samsung in their products.
There are different types of vendors in the market, making everyday lives easy for the consumers and producers. They link and supply the products from different producers to the consumers.