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.