After all, the more vendors compete, the lower the cost of production on our favorite items will be, and the more money we can save as consumers. Understanding the different ways a vendor can insert themselves in the supply chain allows companies to identify new opportunities to compete and gives room for new competitors and companies to emerge and enter the market. When an entrepreneur is looking at starting a business, they are not only limited to trying to solve a problem a consumer is facing, but they can expand the scope of their customer discovery to determine the type of supply chain vendor problem they can solve for businesses or the government. The items are being sold to businesses and will, in turn, generally be stored in inventory either for a short or long period of time (depending on the product).įor the purposes of our computer hardware example, they are likely to be stored in inventory for a short period because of the short refresh lifecycle of flagship electronic components like Intel microprocessors. An example of a B2B vendor is Panasonic, which sells batteries to Tesla, or microchip manufacturers, such as Intel or Advanced Micro Devices, which sell components to personal computer manufacturers. B2B (Business to Business)Ī B2B vendor is one that sells primarily to other vendors. They are individuals who might have built a successful career for themselves in the private sector and have begun contracting out their expertise to the public sector. Some examples of B2G vendors include Raytheon and Lockheed Martin, which sells defense products and components to the Army.Īnother type of B2G vendor can be a government consultant. In the defense industry, there are many vendors that sell different types of equipment through government contracts. The B2G type of vendor sells to the government. Vendors provide a wide-ranging volume of products to the end consumer.
Some vendors even specialize in providing consumer services. It can be a retail store, such as the Gap that sells clothing, or, it can also be a retailer like the now-defunct Radio Shack that sold electronic components, acting as a specialty vendor for the end consumer.Ī vendor can be an online retailer or even someone selling hot dogs at a ballpark.
They sell generally completed products to the end-user or even product components. The B2C type of vendor sells directly to the consumer. Through examples, we can better contextualize the different ways vendors operate and their purpose within the supply chain.
The term vendor can encompass retailers or suppliers broadly with what is often a component in a larger product.īelow, we will look at some different types of vendors and the different customer bases they serve in the market. Vendors can be utilized at different spots in the supply chain, and with multiple occurrences throughout. A vendor refers to an individual or company that sells something to another individual or entity.
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