PROVIDERS: CHARACTERISTICS, FUNCTIONS, TYPES, REAL EXAMPLES - DUDAS - 2025

The suppliers are individuals, organizations or other entities that provide goods or services you need another person, organization or entity. A supplier can be distinguished from a contractor or subcontractor, as this commonly provides specialized inputs to deliverables.

They are the party that supplies goods or services in a business transaction in exchange for agreed compensation. As such, vendors generally do not interact with consumers directly, leaving that task to the vendors or store owners.

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The term "supplier" is normally used with the same meaning as "seller". It is common for a supplier to offer volume discounts to retailers when they agree to sign long-term contracts, or order large quantities.

You don't need to buy the products from dozens of suppliers. You only need a few good providers that you can count on. Purchase orders are generally used as a contractual agreement with suppliers to purchase goods or services.

Part of the trade

In any trade, there must be at least two parties. One of them is the supplier, who provides or supplies products or services, while the other is the buyer or customer, who receives them.

The term "commerce" refers to the activity of buying and selling goods and services. In other words, exchange them for money. For example, in business every company has at least one supplier. Suppliers supply or provide materials, products and services to the company.

characteristics

- A supplier must be reliable and send the requested order correctly, on time and without damage.

- Prices can be negotiated with a supplier. This is one of the main reasons to form a relationship with the supplier.

- A supplier must first meet the budget of the company. Make sure that the agreed price satisfies both the company and the supplier.

- You should seek to buy from a stable supplier, which has little chance of closing in the near future.

-Supply chain

A supplier is part of a supply chain. Between when a product is manufactured and when a customer buys it, the product travels through the people and companies that make up the supply chain.

Basically, this is a network that moves products from the factory to the sales floor. Some networks are simple, while others are complex. Although each supply chain is different, most will be something like this:

- A manufacturer produces a good and sells it to a person or company. The price of the product is the lowest at this stage.

- A distributor moves the product from the manufacturer to a wholesaler or retailer.

- A wholesaler buys the product from the manufacturer or distributor and sells it to a retailer. The price of the product increases with respect to the manufacturer's price.

- A retailer buys the product from the wholesaler and sells it to the consuming public. The price of the product goes up again.

- A customer buys the product from a retailer.

-Relations with suppliers

Develop lasting relationships

If a company intends to use a supplier more than once, it should strive to build a lasting relationship, where the supplier can be easily negotiated.

This relationship will ensure that the provider's capabilities are understood, so that you know when too much is being asked.

It will also ensure that the vendor addresses the future needs of the business before others.

Invest in technology

Today it is easy to find the right vendor management software that is tailored to the specific needs of a business.

With this technology, companies can investigate suppliers, quickly discovering weaknesses through easy-to-read data.

Pay on time

This is a great way to maintain a good relationship with suppliers. Some companies track orders poorly, which means payments can be late.

This leaves the supplier in a bad position, as their cash flow is not secure. They may not trust this client as much as a new client they get.

Simplified agreements

This means that all providers receive the same treatment, regardless of the service they provide.

Features

The role of a supplier in a business is to provide high-quality products from a manufacturer, at a good price, to a distributor or retailer for resale.

A supplier in a company is the entity that acts as a mediator between the producer and the retailer, ensuring that effective communication can be carried out and that the inventory is of sufficient quality.

Suppliers play a very important role at every stage of the product life cycle. From acquiring materials to increasing production, as well as exploring better options for raw materials as the market begins to saturate.

Companies must work closely with their suppliers in order to acquire the best of their assets.

The role of a supplier in a company can be demanding, because retailers expect to receive a certain level of quality, and manufacturers expect suppliers to sell a large number of products.

Because of this, providers must be flexible and understand how to manage relationships. Other important elements of a provider's role include:

Compliance with laws

Suppliers must comply with all relevant laws and regulations, including the protection of human rights and child labor.

Fair transactions for all

Suppliers must provide equal opportunity for all retailers to do business with them. A retailer should not be turned away because of their location or for any other reason.

Best possible price

Suppliers must guarantee the best price and quality to retailers to maintain trust with each other. This will help ensure repeat business in the future.

No conflict of interest

Suppliers should not do business with those with whom they may have a conflict of interest. This would include new or old family members, friends, and colleagues. This is to decrease the likelihood of unfair treatment between other customers.

Types

Manufacturers Suppliers

With manufacturing suppliers, we are working with the source of the supply chain. They research, develop and manufacture the finished product that is purchased.

Indeed, the supply of materials by the manufacturer means that no company will be paid more for the handling and storage of the product.

Many manufacturers produce the materials after they have been ordered. This can create a longer lead time than will be received with wholesalers and distributors.

However, if what is needed is not something readily available or mass-produced, manufacturers can meet the exact specifications required.

Wholesalers and distributors

Wholesalers and distributors are known to buy supplies in bulk, store them, and sell them in small quantities to businesses and retailers.

Since the product is already created, you may have limited options, but order delivery times will be shorter.

Independent craftsmen and commercial agents

Artisans who create their own pieces often sell their work independently or partner with agents, who help sell their final product.

Materials sourced from an independent craftsman are typically ideal for projects that involve low-volume purchases, where lead-time takes a lower priority.

They generally sell directly to retailers or to the end consumer through agents or trade shows.

Importers

Suppliers who import and sell these foreign manufactured products are known as importers.

When materials are sourced through importers, the greatest benefit will be found in high volume orders.

The high volume helps offset the costs incurred for shipping and transporting the materials. It is common to buy from a wholesaler or distributor who also happens to be an importer.

Real examples

Suppose ABC is a furniture manufacturer. Some of your suppliers could be a logging company, an electrical company, and a tool manufacturer. These supply the wood, electricity, and tools to make the furniture.

However, some ledgers only list suppliers of raw materials (such as grains, lumber, raw minerals such as copper, etc.) as suppliers.

They do not refer to service providers such as electricity, water, repairs, etc., but only material providers.

Supplier countries

Suppliers tend to be thought of as individuals or companies. However, the term for countries is also used.

For example, Japan imports virtually all of its oil and gas. Japan's largest oil supplier is Saudi Arabia, followed by the United Arab Emirates and then Qatar. Kuwait, Russia, Iraq, Mexico, and Kazakhstan are also suppliers to Japan.

The United States is one of China's leading soybean suppliers. As China raised tariffs on US soybeans, its soy purchases from Brazil and Argentina increased.

Corporate events

Large corporate events are good examples of when suppliers are needed.

If, for example, a company's human resources department plans a holiday party for its employees, it will look to hire vendors to supply the goods and services for the event.

First, a location must be chosen, in which case the owner of the event space becomes a supplier when the date is reserved and the contract is signed.

Subsequently, the department approaches the decorators, who become suppliers when they are hired to transform the event space into a themed party.

After the theme is implemented, a caterer is hired to provide food and beverages for the party. When the company delivers its service, it becomes a supplier to the company.

References

1. Market Business News (2019). What Is A Supplier? Definition And Examples. Taken from: marketbusinessnews.com.
2. Global Negotiator (2019). Supplier. Taken from: globalnegotiator.com.
3. Karyn Corrigan (2018). What Is a Supplier and What Is Their Role in a Business? Taken from: oberlo.com.
4. Corey Linn (2017). 4 Types Of Material Suppliers And Their Impact On Your Business. Glacial Wood. Taken from: glacialwood.com.
5. Mike Kappel (2016). What Is a Vendor? - Overview for Small Business Owners. Patriot Software. Taken from: patriotsoftware.com.
6. Julia Kagan (2018). Vendor. Investopedia. Taken from: investopedia.com.