What is a vendor: definition and description

New words and terms literally appear daily in everyday life. Some are also rapidly disappearing, but others remain on hearing for a long time. More recently, companies selling something were simply called sellers, then more specialized categories appeared: distributor, dealer, and then vendor. If the first two are more or less clear, the last term is often puzzling. What is a vendor and how it differs from other representatives of the business segment, we understand this article.

Origin of the word

At first this word was called merchants who sold goods from trays. Then, when the trading process became more complicated, the understanding of what a vendor is also changed. The term comes from the Latin word vendere, which translates into Russian as "sell."

Mutually beneficial cooperation

Concept definition

The concept of a vendor means a natural or legal person who is a supplier of any goods or services under a certain brand.This name is usually referred to as large company-owners of trademarks engaged in the development of technologies or software products. Some enterprises create their own products based on existing technologies. They operate under a license issued by the main owner of the program, but distribute the product under their own brand and are also vendors.

Vendor Agreement

Small development companies that create their own products are called independent vendors. Such enterprises produce programs for the mass or niche market. The uniqueness of the technology gives such companies the right to be called independent vendors. For example, the company has created its own system to automate any business process: time tracking, inventory management, and maintenance of a specialized device. Unique programs created for a specific narrow type of activity are capable of providing better performance than products of world brands; therefore, large vendors are very interested in working with independent ones.

Vendor in marketing

To better understand what a vendor is, you should look at this concept from a marketing point of view. A vendor does not have to be a direct producer of a product or service, only ownership of a trademark is key. It is also the responsibility of the vendor to manage the promotion of the brand on the market, competent distribution of the product among distributors, if their number exceeds one.

Relationship with vendor

The chain of interactions is as follows:

  • in the first place is the manufacturer;
  • it is followed by a vendor - the owner of the brand;
  • next is the distributor, it can be both official and unofficial;
  • dealer - regional distributor of the product;
  • The most recent link in the sales chain is the buyer.


Let us consider in more detail what a vendor is in various activities. The specificity of a particular business area affects the definition of the final concept. In the banking sector, the vendor is a supplier of equipment and software for the production and maintenance of plastic cards. In the field of information technology - a supplier of goods, components, computer programs under its own brand.In leasing, the vendor also serves as a supplier of certain equipment, which through a network of distributors is leased to end users.

There is a separate type of business called vending. In this case, the vendor is a supplier of vending machines through which the sale of goods or services. The term is often applied to the apparatus itself.

Now you know what a vendor is and you can freely use this term during business negotiations and personal conversations.

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