What Types of Vendors Are There?

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In a distribution network, a distributor, or a reseller, is a business that brings supplies or products to the actual end users. In most cases, a distribution network vendor designs and sells products to the final link in the distribution chain. Today, these terms often refer to a distributor of any product or service. The distributors in distribution networks usually receive orders from the manufacturers or companies who own the products. They then transport the products to the end user, where they are used or stored until the customer makes a purchase.

In contrast, the relationship between a supplier and a distributor is much more intimate. In a distribution network, the two parties directly interact with one another. Distributors use their data management systems to keep track of orders for goods and services that they have signed up to sell to other companies. A supplier on the other hand, uses his own data management system to track orders from different customers and generate reports, calculating discounts for volume purchases. Both types of vendors work together to make sure that their company remains profitable.

In raw materials, the relationship between a vendor and a supplier is more intimate. In raw materials, a vendor locates the best sources for raw materials such as oil, aluminum, or steel, and then finds a way to sell these raw materials to companies that need them. In this process, the vendor not only works with a single supplier, but he or she works with several suppliers. This type of vendors is referred to as “multi-vendor distributors.” They buy raw materials from several different suppliers, and then package and deliver products to customers.

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