What is a Supplier?
In terms of language, a supplier is a supplier. Suppliers are individuals or companies/businesses that provide products or services to other entities.
In business, suppliers provide high-quality products from manufacturers at reasonable prices to distributors or retailers for resale.
A supplier in business is someone who acts as an intermediary between the manufacturer and the retailer. They also ensure that the following stock is guaranteed in sufficient quantity. Then, is the supplier the same as the distributor?
These two terms are often used interchangeably. When viewed from the role, both have different tasks.
Distributors generally only focus on distributing or selling products to retailers to reach the final consumer.
Meanwhile, suppliers provide products in the form of raw materials. These raw materials will later be processed by producers into finished goods that are ready to be sold.
Types of Suppliers
When viewed from the products produced, suppliers consist of suppliers of goods and suppliers of services. To better understand the difference between the two, please refer to the following description!
1. Supplier of Products in the Form of Goods
As the name suggests, goods suppliers are responsible for supplying raw materials to producers. Later, suppliers will process the raw materials into ready-to-sell products. Examples of suppliers of goods are suppliers of paper for the printing industry or suppliers of sugar cane for the sugar industry, and so on.
Suppliers of goods are further divided into two types, namely suppliers of fabricated and non-fabricated materials.
For fabricated products, the ordered material must be processed first by the supplier before being brought to the place of the orderer. By the customer, they will convert this semi-finished product into a ready-to-use product. An example is a supplier of wool or nylon fiber that supplies material for a fabric factory.
Meanwhile, non-fabricated suppliers are in charge of supplying raw materials that do not go through a first process—for example, wood suppliers who provide raw materials for making furniture.
2. Product Suppliers in the Form of Services
Service suppliers play a role in providing supplies in raw materials, which they will later process into ready-to-sell products in the form of services. Examples of service product suppliers are cashier software providers or financial applications that make it easier for consumers to manage company finances.
How Suppliers Work
Supplier plays a vital role in every production cycle of a product, both goods, and services. Starting from looking for raw materials to help increase production.
Suppliers can also help find alternative raw material options when market conditions are not good. Cooperation between producers and suppliers must be well established so that the final product produced is also good.
With the advancement of existing technology, the work process carried out by suppliers has become more accessible. Some of the main tasks that are generally the responsibility of suppliers are:
- Suppliers are suppliers of raw materials. The raw material procurement process can be done alone or obtained through a partnership process with other parties.
- Provides raw material related data. Before the raw material provided is delivered or sold to the next party, the supplier must prepare information regarding the raw material.
- Marketing products. Just like finished products, they can also market raw materials online and offline. The information available on the internet will also make it easier for producers of goods and services to find suppliers for their products.
- Forge partnerships with entrepreneurs. Not only for one-time or two-time sales, suppliers generally carry out long-term cooperation with entrepreneurs. Not only by guaranteeing stock availability, but also the quality of the raw materials they provide.
- Maintain the services provided. The service referred to in this case is not only related to the quality of the raw materials but also related to the way suppliers establish relationships with companies that partner with them.