Suppliers

What Is a Supplier in a Business?

A supplier is a person or business that provides a product or service to another entity. 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 business is someone who acts as an intermediary between the manufacturer and retailer, ensuring that communication is forthcoming and stock is of sufficient quality.

The Importance of a Supplier in the Product Lifecycle

Suppliers have a hugely important role at every stage of the product lifecycle. From sourcing raw materials to helping ramp up production, and to finding better options for raw materials as the market starts becoming saturated, companies need to work closely with their suppliers to get the best out of their products.

Examples of the Role of a Supplier

The role of a supplier in a business can be a demanding one as retailers expect a certain level of quality, and manufacturers expect suppliers to sell a lot of stock. Due to this suppliers must be flexible and understand how to manage relationships. Other important elements of a supplier’s role include:

• Compliance with local laws: Suppliers should comply with all relevant laws and standards, including human rights protection and child labor.
• Equitable transactions from all retailers: Suppliers must provide equal opportunities for all retailers to do business with them. A retailer should not be rejected due to their location, or any other reason.
• The best price possible: Suppliers must guarantee the best price and quality to retailers to maintain trust among them. This will help ensure repeat business in the future.
• No conflict of interest for suppliers: Suppliers should not do business with those with who they may have a conflict of interest with. This would include family members, friends, and new or old colleagues. This is to decrease the likelihood of unfair treatment among other customers.

What Is the Difference Between a Supplier vs Distributor?

As highlighted above a supplier supplies a product or service to another entity, usually a distributor who will sell it to a wholesaler or retailer. Suppliers can also be the manufacturer of the product and the distributor of the product. More often they cannot take on the additional workload of distribution so they outsource this activity to another company. A distributor, on the other hand, sources products from suppliers and sells them to a wholesaler or retailer at a slightly higher price to make a bit of profit for themselves. The main difference between these two groups is that one works more closely with the manufacturer (the supplier), and the other works closely with the retailer (the distributor).