You could use either word to describe someone selling products from a booth at the market or a store on the street. These words are often used interchangeably.
The word vendor is also used in an accounting context to describe a company that another company is buying products or services from. The vendor also means the seller. The term ‘ vendor financing’ refers to the seller providing credit to the buyer.
The word merchant can be used in a very general term to describe anyone who is selling something, or even a whole class of people as in ‘merchant class’. You would never say ‘vendor class’, so I guess the word vendor is a bit more specific.
A merchant is someone whose occupation is selling; I tend to think of it as a shopkeeper or stall-holder - the retail side, and the sole trader / self-employed end of that. But it does not preclude wholesale or import / export traders. It does not, in my mind, include employed shop assistants. It is a perfectly acceptable contemporary word, but feels a little old-fashioned, perhaps by association with phrases like "merchant adventurer" and "merchant banker". It harks back to vanished trades like "coal merchant" and "corn merchant".
A vendor is anyone selling anything - if I sell you my car, I am a vendor, although I am not a car "merchant". It has acquired a narrower meaning in the context of business-to-business commerce, especially high-tech equipment; the "vendor" is the original manufacturer of the equipment, as distinct from a distributor, reseller, or integrator.1
A vendor is a person or a company that supplies goods to the people. To make it simpler, we may take the example of vendors from our daily lives. For example, the ice-cream seller in the street is a vendor, a shopkeeper is a vendor that sells many products, or if we go onto a larger scale Amazon, eBay, OLX etc. are the vendors that provide goods to the customers. The vendors get connected to the manufacturers through a third party known as a supplier. The sale scale, i.e. bulk or small depends upon the vendor’s market scale.
A supplier is a person or an organization that is responsible for providing the products to the vendor. Suppliers usually deal with the product delivery to the one who shall further sale it. If a vendor sells the object for further resale, he may not be called vendor any more. As the one, who sell products for resale is called the supplier. The supplier has a direct relation to the manufacturers and direct relation to the vendors too. In other words, it connects market to the manufacturers.
I guess the difference is obvious!
Vendor - Who purchases usually products and services to resell, to the final consumer that is B2C(Business to Costumers). But it doesn’t limit then to B2C, if vendor purchase in large quantity then he or she can supply stock to small vendors as B2B.
Distributor - A person who is an intermediary in the supply chain between the manufacturer and the vendor. Thus distributor supply comes under B2B(Business to Business) and you will find very few distributors engaged in B2C which depends on dead stock or their business model.
Vendor and Distributor both are playing an important role in the Supply Chain.
The Difference Between Vendor and Distributor:
Vendor:
A vendor is a person who purchases products and services to resell to a final customer. Yes, vendors have direct contact with the consumers. Vendors are the last person in the supply chain and its relationship of business to customer.
Distributor:
The distributor is in the supply chain between the manufacturer and the vendor. They include programs like providing services, warranties, demos, etc.
There is wide difference between vendor and distributor. Vendor is a supplier - offering to sell a product or service. Distributor is part of sales network of a company - helping the company by reselling their product. A distributor is part of larger family - no outsider. Distributor represents the manufacturer in a remote market while vendor is an outside entity that supplies a product or service.
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