Difference between a vendor and a supplier

The global economy works through millions of interconnected supply chains, often crossing many borders in the process, with vendors and suppliers acting as the engines that drive this complex network.

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Page written by Chris Godfrey. Last reviewed on July 26, 2023. Next review due April 6, 2025.

We all know the names of the world’s biggest manufacturers, but it’s their anonymous vendors and suppliers who provide most of the required goods and services to create the finished products we use every day. But what’s the difference between a vendor and a supplier? How do they complement each other, and what exactly do they do? Read on to discover all you need to know about vendors and suppliers and where they stand in the supply chain.

What is a vendor?

A vendor is a party in the supply chain that buys goods from manufacturers and then sells those goods to companies or consumers – this is known as a distributor sales channel. However, a vendor may also operate as both the seller and the manufacturer of goods – creating the products and then selling them to companies and consumers without the intervention of a distributor. This is called a direct sales channel.

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What is a supplier?

A supplier is a person or business that provides services, raw materials, components, and machines to manufacturing or service businesses. Suppliers typically operate on a B2B basis, and do not sell to the end consumer. Depending on the products being manufactured, there may be dozens, or even thousands of suppliers involved in the production process.

Where do vendors and suppliers fit in the supply chain?

Suppliers feed into the supply chain before the manufacturer, providing materials, components and labour to help the manufacturer create the finished item. Vendors sell (distribute) the end products from the manufacturer to companies or consumers. Suppliers and vendors are both necessary to the functioning of the supply chain.

Is vendor finance available for both vendors and suppliers?

Yes. Vendors and suppliers may use vendor finance to fund their own purchases of inventory and equipment, or they may provide vendor finance to support their customers purchasing. In the latter case, the vendor lends the customer the value of the sold goods and is repaid by regular instalments, or by a lump sum at a fixed future date. A form of asset finance, vendor financing is a ‘buy now pay later’ loan agreement between the vendor and the customer. Some vendors may provide the capital for these loans themselves. Others may utilise the capital and services of an external finance provider.

Vendor financing can be good for sellers wishing to expand their sales network, maintain good customer relationships, or even clear old inventory or introduce new products. Vendor loans can be good for buyers who do not have sufficient working capital to purchase the goods they need for cash, or a credit record that lets them buy the inventory or equipment with a traditional small business loan. Vendor loans typically indicate a good business relationship between the vendor and the customer, as the vendor is trusting their client to pay when more formal lenders may not accept the risk

How Swoop can help

No matter if you’re a vendor or a supplier, Swoop can help you secure every type of business finance. Here’s a quick look at some of the funding solutions we provide:

Vendors

Vendor financing – for your business or to support the purchasing of your customers.

Vendor notes – loans for your customers to help them buy from you again and again.

Working capital loans – ready cash to help you to expand your inventory and the services you sell.

Suppliers

Small business loans – borrow from £1,000 to £500,000. Repay the loan in a few months or over years.

Asset finance – buy vehicles, plant and machinery over time.

Revolving credit line – dip into a pre-agreed credit limit as and when you need funds.

Invoice finance – receive the cash tied up in your outstanding invoices as soon as you raise them.

Start-up loans – cash to get your new business off the ground.

Get started with Swoop

Finding the best finance for your business’ unique requirements can be difficult and time consuming. The paperwork and processes you must complete will vary from one lender to another. Without expert guidance, SMEs could find themselves forever searching for the business funding that they need. Instead, working with a broker, who can secure financing from a wide range of lenders is a better way to go. No more cold calls and demands for information, just tell us what you need and leave the rest to us.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

Swoop promise

At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

Find out more about Swoop’s editorial principles by reading our editorial policy.

Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Vendor financing: https://swoopfunding.com/uk/vendors/

Asset financing: https://swoopfunding.com/business-loans/asset-finance/

Working capital: https://swoopfunding.com/uk/business-loans/working-capital-loans/

Small business loan: https://swoopfunding.com/uk/vendors/

Revolving line of credit: https://swoopfunding.com/loans/revolving-credit-facility/

Invoice finance: https://swoopfunding.com/uk/business-loans/invoice-finance/

Start-up loans: https://swoopfunding.com/uk/business-loans/startup-loans/