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What are Suppliers?

Suppliers may export consumer products to a company in a different country.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 06 November 2014
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Suppliers are individuals or businesses that provide goods or services to vendors in return for the agreed upon compensation. As such, suppliers do not generally interact with consumers directly, leaving that task to vendors or shop owners. It is not unusual for a supplier to provide volume discounts to vendors when they agree to sign long-term contracts or place orders for large quantities.

There are suppliers found in just about any type of profession that can be imagined. Wholesale suppliers are very common in the retail industry, where they are likely to manufacture and deliver large quantities of products to their client. Supply companies also work in niche markets as well, such as importing and exporting packaged foods, ethnic or cultural goods, or any other range of products that have a small but reliable demand. In general, exporters of this type will handle all the details for shipment and delivery to the vendor, and include the associated costs in the final charges issued to the client.

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One of the main strategies of suppliers is the creation of volume discounts for vendors who place orders for large quantities of a specific good or service. In many cases, the discounts are structured as tiered pricing. That is, the supplier will charge a fixed price per unit if the order is for up to a thousand units, but offer a specific discount if the order is for between 1001 and 2000 units. A higher tier discount is applied if the order is between 2001 and 3000 units, followed by an even higher discount if the order is in the 3001 to 4000 unit range, and so on.

Some suppliers choose to make the discount a little simpler by applying a fixed discount that applies to any order quantity over a certain number of units. Other suppliers prefer to go with discounts issued to customers who are willing to enter into contracts that feature a duration of two to five years and commit the vendor to order a minimum number of units between the beginning date and ending date specified on the contract. Should the vendor fail to purchase that minimum number of units during the life of the contract, the supplier has the option of going back and charging penalties of some type.

Suppliers rarely rely simply on competitive pricing in order to secure steady clients. Along with price, they also tend to strive for quality, an attractive range of goods and services, quick response to customer queries, and timely delivery of the products once the order is placed.

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Discuss this Article

anon974567
Post 7

So what is the suppliers role and what would happen to a business if there was no supplier?

anon247622
Post 5

What is the adoption and diffusion process for new products?

schrodinger
Post 3

@scienceguy34 -- You’re right about the scam part. I got involved with a company (which I won’t name here) that supplied a large variety of retail items; everything from Men’s shoes to dog collars.

I set up an ebay business selling some of this merchandise and ended up losing money! While this particular supplier had an impressive marketing campaign with infomercials stating how customers could easily quite their job on the income generated from selling their wholesale merchandise, their entire catalog was filled with items that had ridiculously small profit margins. Do yourself a favor and go with a *real* supplier that has a *real* profit potential. Avoid suppliers with elaborate marketing schemes.

scienceguy34
Post 2

@vanderson -- This is a good question! Finding a good supplier can be a difficult affair, and sometimes you will have to have the right connections. I’ve seen guides for sale on the internet (I think there are some on ebay, I would check that first) that are essentially a compiled list of many different retail suppliers, some of which cater specifically to a start up business.

I would be very careful through, as there are many ‘suppliers’ that are little more than an elaborate scam. When you find a supplier, make sure to research it vigorously! Google it and look for actual user reviews from independent sources. There are many blogs that deal with these sorts of topics and provide evaluations of different suppliers from an honest user’s viewpoint.

vanderson
Post 1

So, if I were starting up a retail business, how do I go about finding a supplier?

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