The difference between Supplier and Vendor

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The difference between Supplier and Vendor: both are translated as “supplier” in Chinese, but in reality the two terms have significant differences in meaning. In the United States, these two words have a certain industry and occupational background. Let’s talk about careers first. Professional practitioners in formal procurement and supply management rarely use the term “Vendor”. Supplier is the formal term. I know a supply management director whose theory is very simple: if an interviewer keeps talking about vendors, it indicates that the person is not professional enough – it’s a bit absolute, but there’s some truth to it. You hardly see any Vendors throughout the entire training for Certified Purchasing Manager (C.P.M.) certification. You won’t find many Vendors in those classic procurement textbooks either. So, if you want to appear like a procurement professional, don’t use Vendor – use Supplier. That’s also why the supplier management department in large companies is called Supplier Management. If you call it Vendor Management, then you’re an amateur. Speaking of the industry. In some industries, such as retail, vendors are used quite frequently. This is related to the literal meaning of Vendor. Because a Vendor reminds one of street vendors, adding little value throughout the selling process. The U.S. retail industry has a well-known Vendor Managed Inventory Program (VMI), which involves the supplier managing the inventory in retail stores, with automatic replenishment when the level drops below a certain threshold. Vending machines are also called Vendor Machines. But in complex industries, where the goods and services provided by suppliers are complex and carry significant added value, suppliers are rarely referred to as \"Vendors\". Who has ever heard Boeing refer to its engine suppliers as \"Vendor\"? So, when you don’t know which word to use, use Supplier. If you want to appear ignorant or to show great disdain for the procurement and supply management department, then just say that it is responsible for managing vendors. It seems that those supply management professionals in the U.S. who earn hundred thousand dollars a year are nothing more than managing some street vendors. The reputation of the Supply Management field in the United States is increasing year by year, mainly because companies are outsourcing more and more tasks, relying increasingly on suppliers (note: not vendors), and thus needing professionals to manage this process. If you want to know what these people’s incomes are like, see the “ISM Wage Survey (2006)”.