Meaning of Vendors: Definition, Function, Duties, and Types of Vendors

What is a vendor? In general, the meaning of vendor is the party (institution or individual) who provides / sells raw materials, supporting materials, services, or products that are processed or resold by other companies to support the company’s performance.

Another opinion states that the definition of a vendor is a company or individual who sells a product (goods or services) to other parties (companies or individuals) to support the performance of other companies or raw materials to produce finished products that will be sold to end consumers.

In this case, the vendor not only sells raw materials but can also be semi-finished products or important components to make a finished product. Apart from selling materials, there are also vendors who sell certain services or expertise that other companies don’t have.

Also read: Meaning of Reseller

Vendor Functions

Referring to the meaning of vendor as described above, the vendor’s function is as a party that ensures the availability of goods or services needed by a company for its operational activities.

In other words, a company needs a vendor when certain raw materials or work cannot be provided alone so it requires other parties to provide it. Products purchased from vendors can be raw materials, auxiliary materials, semi-finished goods, or services to perform certain jobs.

The existence of vendors is very important for the smooth operation of a business. That is why every company always pays attention to and supervises the quality of the work of the vendors with whom it partners.

Every problem that occurs at a vendor will have an impact on the partner company. For example; distribution problems will have an impact on the timeliness of delivery, have an impact on the quality of materials, have an impact on the quality of the products produced, and so on.

Also read: Meaning of Dropship

Duties and Responsibilities of Vendors

Basically, the vendor’s job is to ensure that the goods or services of a company are properly available. In accordance with the meaning of the vendor described above, the duties of the vendor are as follows:

  • Fulfill every request from the company that is its partner in accordance with the agreement.
  • Ensure that every product (goods or services) sold to consumers is a quality product.
  • Ensure that the delivery of goods / services is in accordance with the specified deadlines.
  • Providing the best service at competitive prices to consumers.

Also read: Understanding Distributors

Meaning of Vendors and Types

Vendors can be differentiated based on the type of product being sold, namely goods and services. There are vendors who specialize in selling products in the form of raw materials, semi-finished goods, and supporting materials. There are also vendors who specialize in selling products in the form of services.

  1. Goods Provider Vendors

Goods provider vendors are institutions or individuals who sell products in the form of goods to a company to support the company’s operations.

Example; A fabric factory needs machines that can produce fabrics. Then the fabric factory will look for a vendor who sells fabric producing machines.

  1. Service Provider Vendors

Service provider vendors are institutions or individuals who sell services in a certain form of expertise to other companies.

Example; Fabric companies need courier services to deliver the fabrics they produce to retail companies. Then the fabric company will work with vendors who specialize in shipping goods.

Also read: Supply Chain Management

This is a brief explanation of the meaning of vendors, functions, tasks, and types of vendors in general. Hopefully this article is useful and adds to your insight.


by Abdullah Sam
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