In a supply chain, a seller, or a distribution vendor, is a business that brings goods or services to the public. In general, a distribution vendor sells goods/services to the next stage in the supply chain. In today’s world, these terms often refer to a distributor of any product or service. A retailer, on the other hand, deals directly with the consumer. In this article, we will discuss the differences between the terms.
In manufacturing terms, the term distributor refers to any dealer that sells directly to the end users. In most cases, the distributors are manufacturers themselves. However, some distributors are third-party vendors hired by the manufacturer to make purchases from their facilities. In retailing, the term retailer refers to a dealer that sell directly to the end users, and not to any establishment that make the products or deliver them to end users. It can also be used for wholesalers who sell directly to retailers.
In the case of wholesalers, they are one-stop-shops where they buy goods straight from the manufacturer and deliver them directly to the customers. Most of them are family-owned small businesses that are usually located in the local area. Some vendors buy goods in bulk from manufacturers and then resell them to retailers, or sometimes directly to wholesalers or retailers. In this type of business, the manufacturer supplies the raw materials and the wholesaler provides the finished product.
In the distribution process, the vendors make deliveries to retailers, who then resell them to end users. The distribution process can either be passive or active. In a passive system, the suppliers do not make deliveries and do not resell the items. But, they do enter into a supplier relationship management process, which is basically a system that gives instructions to vendors and monitors the supply chain performance.
In an active system, where there is constant contact between the producers and the retailers, the chains do not break down. Instead, both parties benefit by having regular and mutually beneficial relationships with each other. The retailers can purchase goods from wholesalers at wholesale prices, which enables them to offer consumers lower prices. The wholesalers can offer consumers lower prices than that to other retailers, as they are able to buy goods from producers at wholesale costs and pass on the savings to retailers.
An independent vendor is a third party, who sells goods and services directly to consumers and does not form a distribution network with any of the participants in the chain – i.e., wholesalers, retailers, and suppliers. An independent vendor works only to sell goods and services to individual consumers. In most cases, the independent vendors function solely as middlemen. They have neither a production nor a distribution network in most cases. Independent vendors do not benefit directly from the relationships between retailers, wholesalers, manufacturers, and suppliers, although they benefit when consumers pay less for the goods and services they purchase from the middlemen.