Vendor Explained

"Vendor" is a very general term, referring only to the party within a given transaction that sells goods to another party. This is significant as a vendor is only referenced in terms of a buyer. A retailer might be a vendor in some cases, even though it's selling directly to the consumer, just as a company which sells to another company might be a vendor.

Often vendors are considered to be the intermediaries within the supply chain of business, meaning that vendors are considered to be the groups that sell items to a retailer, for example, so that the retailer might then sell those items to the consumer. However, vendor is an open enough term that it can be used for those situations and more.

A vendor might be both manufacturer and vendor, which means that the vendor might manufacture the goods which it then sells. According to many definitions of a vendor, a vendor will manufacture inventoried items and sell those items directly to consumers.

Vendors can often be found on an organized list of vendor information and vendor ID numbers. Vendor ID numbers are usually assigned to vendors simply to keep track of the many different vendors that might be available in a given field. In most cases, vendor ID numbers will remain consistent for that vendor, even though that vendor might sell to multiple buyers. A vendor ID number is primarily a tool for the proper conduct of business, although sometimes it might be used to assist with such things as a quality audit of the vendor.

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