Supplier Vs Manufacturer: A Guide On What You’ll Need To Look For

Table of Contents

Get the latest e-commerce industry news, best practices, and product updates!

Reading Time: 13 minutes

When it comes to running a successful business, partnering with the right suppliers and manufacturers is crucial for seamless supply chain operations. However, finding the right ones can be a daunting task. In this guide, we will explore what to look for when choosing suppliers and manufacturers, the requirements, and where and how to find suppliers and manufacturers. Whether you are a small business or an enterprise, this guide will provide valuable insights into the supplier and manufacturer selection process.

Who Is A Supplier?

A supplier is a company or an entity that provides goods or services to another individual or company. Suppliers do not manufacture the goods themselves. Rather, they deal with the procurement of distribution of already produced goods by several manufacturers. These products are then transported to retailers, wholesale suppliers or end consumers. 

Suppliers are responsible for managing inventory, sourcing products, and delivering the finished product to the consumer. These suppliers would usually work with several manufacturers to offer their consumers a wider range of products. 

The role of a supplier in business can vary depending on the customer’s specific needs. In general, however, their primary function is to provide the goods or services that customers need to operate their business. This can include everything from raw materials for manufacturing to finished products for resale.

Who Is A Manufacturer?

A manufacturer is essentially an entity or a company that manufactures goods or products. They usually make use of raw materials and components to transform the raw materials into full-functioning, finished goods.

Manufacturers can be either small-scale, as in they produce goods in smaller quantities, or large-scale, as in producing goods in much larger quantities. They also have full control over the entire production process. This commences from the sourcing of the raw materials up to the delivery of the finished goods to the consumer. They are also responsible for producing, designing, and testing the products to ensure they meet the needed standards and requirements.

Manufacturers often have specialized equipment and skilled workers trained to produce high-quality products. They use raw materials and other inputs to create finished goods, which are sold to other businesses or consumers. Manufacturers may also provide services such as installation, repair, or maintenance of the products they produce. Effective management of the manufacturing process is critical for businesses that want to ensure high-quality products, efficient production, and reliable supply to meet customer demand.

The Difference Between Supplier And Manufacturer

The terms supplier and manufacturer are used interchangeably oftentimes in the commerce industry. However, they are quite different from one another. Though they are both heavily involved with the production and distribution of goods, both parties play varying roles in the supply chain. 

The main difference between a supplier and a manufacturer is their focus. Manufacturers are primarily concerned with producing goods, while suppliers are primarily concerned with supplying goods. This means that manufacturers are often more concerned with the quality and efficiency of their production process, while suppliers are more concerned with meeting the needs and demands of their customers.

Another difference between manufacturers and suppliers is their level of involvement in the supply chain. Manufacturers are typically involved in every stage of the supply chain, from designing and producing products to distributing them to retailers or other businesses. Suppliers, on the other hand, may only be involved in a specific part of the supply chain, such as providing raw materials or finished products to manufacturers or retailers.

In terms of risk, manufacturers and suppliers also face different types of risk. Manufacturers may face risks related to their production process, such as equipment failure or supply chain disruptions. On the other hand, suppliers may face risks related to customer demand, such as changes in customer preferences or shifts in the market.

Communicating With Suppliers Vs Manufacturers

AspectManufacturersSuppliers
Type of CommunicationProduct-based and technicalBusiness focused and transactional
FocusDesign and production detailsDelivery and pricing details
FrequencyOngoing and regularBased on the requirement or periodic
Involvement levelsHighMedium to low
Decision-makingInfluentialSupportive or advisory
RelationshipCollaborativeShort-term or transactional

The Primary Objective Of A Supplier

The main objective of a supplier is to satisfy the needs and requirements of their customers. Suppliers must understand their customers’ needs, preferences, and expectations to achieve this objective. They must be able to provide a customized solution that meets those needs while maintaining a competitive price. This requires suppliers to have a deep understanding of their customers’ businesses and the industry they operate in.

Another objective of supplier management is to establish a long-term relationship with their customers. This involves building trust and demonstrating a commitment to customer satisfaction. By providing consistent, high-quality goods or services, suppliers can build a reputation for reliability and dependability. This, in turn, can lead to repeat business and referrals, helping to sustain the supplier’s business over the long term.

Suppliers also have a responsibility to manage their costs effectively. By minimizing waste, optimizing production processes, and sourcing materials and resources efficiently, suppliers can keep their costs down, which can lead to a more competitive pricing strategy. However, cost-cutting should not come at the expense of quality, as this can damage the supplier’s reputation and ultimately hurt their business.

In addition to satisfying their customers’ needs and managing costs, suppliers must also be responsive to changes in the marketplace. This may involve adapting to new technologies, keeping up with changes in regulations or standards, or adjusting their production processes to meet changing demand. By staying up-to-date and flexible, a product supplier can remain competitive and better able to serve their customers’ evolving needs.

The Primary Objective Of A Manufacturer

The primary objective of a manufacturer is to produce high-quality goods that meet the needs and expectations of their customers. Manufacturers play a critical role in the supply chain, transforming raw materials into finished products that are then sold to end-users. The success of a manufacturer is measured by their ability to consistently produce high-quality goods at a competitive price.

Another objective of a manufacturer is to ensure the quality of their products. This involves adhering to strict quality control processes, ensuring that products meet or exceed customer specifications, and complying with regulatory requirements. Manufacturers must also maintain a focus on continuous improvement, striving to identify and correct issues that could impact product quality.

Manufacturers also have a responsibility to manage their costs effectively. By minimizing waste, optimizing production processes, and efficiently sourcing materials and resources, manufacturers can keep their costs down, leading to a more competitive pricing strategy. However, cost-cutting should not come at the expense of quality, as this can damage the manufacturer’s reputation and ultimately hurt their business.

In addition to satisfying their customers’ needs and managing costs, manufacturers must also be responsive to changes in the marketplace. This may involve adapting to new technologies, keeping up with changes in regulations or standards, or adjusting their production processes to meet changing demand. By staying up-to-date and flexible, manufacturers can remain competitive and better able to serve their customers’ evolving needs.

Where To Look For Manufacturers

When finding manufacturers, there are several sources to consider. Here are some places to look for manufacturers:

1. Trade shows: Attending trade shows related to your industry is an excellent way to connect with potential manufacturers. These events bring together manufacturers, suppliers, and other industry professionals, providing an opportunity to see their products, learn about their capabilities, and establish relationships.

2. Industry directories: Many industries have directories that list manufacturers, suppliers, and other industry-related businesses. These directories can be a valuable resource for finding manufacturers in your industry.

3. Online marketplaces: Online marketplaces can be a good source of manufacturer information. These platforms allow you to search for manufacturers by product type, location, and other criteria, providing a convenient way to connect with potential suppliers.

4. Referrals: Asking for referrals from colleagues, industry associations, or other businesses can be an effective way to find manufacturers. Word-of-mouth recommendations can provide valuable insights into a manufacturer’s quality, reliability, and customer service.

5. Social media: Social media platforms such as LinkedIn, Twitter, and Facebook can be a useful way to find and connect with manufacturers. Many manufacturers have a social media presence, and engaging with them on these platforms can be a good way to start a conversation.

6. Government resources: Government agencies such as the Department of Commerce, Small Business Administration, offer resources and support to businesses seeking to connect with manufacturers. These agencies can provide information about manufacturers, trade regulations, and financing options.

7. Online search engines: Conducting a search on popular search engines like Google can also lead you to manufacturers. By using specific keywords such as “manufacturer” or “supplier” along with your product or industry, you can find companies that match your requirements.

What Are The Benefits Of Partnering With A Supplier?

Partnering with a supplier can provide a range of benefits for businesses of all sizes. Here are some of the key advantages if you’re looking for supplier partnership:

1. Cost savings: Working with a supplier can help businesses reduce their costs. By buying materials or products in bulk, suppliers can offer lower prices, which can help businesses save money. Additionally, suppliers can help businesses avoid the costs of maintaining a large inventory or dealing with production issues, which can further reduce costs.

2. Improved quality: Suppliers are often specialists in their field, and as a result, they have a deep understanding of the products they sell. This expertise can lead to better quality products and materials, which can help businesses produce higher-quality products themselves.

3. Increased efficiency: Partnering with a supplier can help businesses streamline their supply chain and improve their overall efficiency. By working with a reliable supplier, businesses can reduce the time and effort needed to manage their supply chain, freeing up resources to focus on other areas of their business.

4. Access to new markets: Many suppliers have a network of contacts and customers, which can help businesses access new markets and expand their customer base. By partnering with a supplier, businesses can tap into these networks and take advantage of new opportunities.

5. Risk mitigation: Partnering with a supplier can help businesses reduce their supply chain risk. Suppliers often have contingency plans in place to deal with unexpected disruptions, such as natural disasters or production issues, which can help businesses mitigate risk and maintain continuity of supply.

6. Flexibility: Suppliers can provide businesses with greater flexibility in terms of production and delivery. By working with a supplier, businesses can adjust their orders to match fluctuations in demand or changing market conditions, helping them stay agile and responsive.

7. Innovation: Suppliers can be a valuable source of innovation for businesses. Many suppliers are constantly looking for ways to improve their products and processes, which can lead to new ideas and opportunities for businesses. By partnering with a supplier, businesses can tap into this innovation and stay ahead of their competitors.

8. Focus on core competencies: Partnering with a supplier can allow businesses to focus on their core competencies. By outsourcing certain aspects of their supply chain to a trusted supplier, businesses can free up resources and focus on what they do best, whether that’s product design, marketing, or customer service.

The Supplier-Manufacturer Relationship: Implications for Businesses

The relationship between a manufacturer and supplier is a crucial aspect of any business that relies on a supply chain to produce and distribute its products. The quality of this relationship can have significant implications for businesses, from the cost and quality of their products to their ability to compete in the market. Here are some of the key implications of the supplier-manufacturer relationship for businesses:

1. Cost of materials: The cost of materials is a significant factor in the production of any product. By establishing a good relationship with suppliers, manufacturers can negotiate better prices for their materials, which can lead to cost savings and improved profit margins.

2. Quality of products: The quality of a manufacturer’s products is often closely tied to the quality of the materials they use. By working with reliable and high-quality suppliers, manufacturers can ensure that they are producing products that meet the expectations of their customers.

3. Timely delivery: The timely delivery of materials and products is essential for any business. By working with suppliers who are committed to timely delivery and have a reliable supply chain, manufacturers can avoid production delays and maintain customer satisfaction.

4. Innovation: The supplier-manufacturer relationship can be a source of innovation for businesses. By collaborating with suppliers to develop new products or improve existing ones, manufacturers can stay ahead of the competition and meet changing customer demands.

5. Risk mitigation: The supplier-manufacturer relationship can help businesses mitigate risk in their supply chain. By establishing multiple suppliers for critical materials or products, manufacturers can avoid disruptions due to supplier failures, natural disasters, or other unforeseen events.

6. Reputation management: The quality of a manufacturer’s products can have a significant impact on their reputation in the market. By working with reputable suppliers who provide high-quality materials, manufacturers can enhance their reputation and build trust with customers.

7. Legal and ethical considerations: The supplier-manufacturer relationship can also have legal and ethical implications for businesses. For example, manufacturers must ensure that their suppliers comply with labor laws and environmental regulations, to avoid reputational damage or legal consequences.

8. Competitive advantage: The supplier-manufacturer relationship can provide businesses with a competitive advantage. By working with suppliers who provide high-quality materials, timely delivery, and innovative solutions, manufacturers can differentiate themselves from competitors and gain market share.

FAQs

What is an example of manufacturer and supplier?

An example would be, ​​a car manufacturer buying tires from a tire supplier. This demonstrates a relationship between a supplier and a manufacturer.

What is the relationship between supplier and manufacturer?

To create an SKU number, you can use a combination of letters, numbers, and symbols representing key product information, such as its category, brand, colour, size, and style. The formatThe relationship between a supplier and manufacturer involves the supplier providing materials or services to the manufacturer for the production of goods. and structure of your SKU system will depend on your business’s specific needs and preferences.

Is supplier and manufacturer the same thing?

No, suppliers and manufacturers are not the same, as suppliers provide materials or services to manufacturers, while manufacturers produce goods using those materials or services.

Could a supplier be a manufacturer ?

Yes, a supplier could also be a manufacturer if they produce goods in addition to providing materials or services to other manufacturers.

Experience fulfillment by LOCAD

Grow your business through Locad’s simplified and automated fulfillment solution

  • Unlimited and scaleable warehousing
  • Pay only for what you store
  • No hidden fees or lock-in periods
  • Zero inbound costs
  • Wide integration with marketplaces
  • Automated logistics and delivery
Get the latest e-commerce industry news, best practices, and product updates!

Don't miss out on the latest news!

Get the latest industry news, best practices, and product updates!

Up to $250K USD Credits for Locad Customers!

Sign up today and accelerate your growth with Locad’s Partners. Unlock deals across SaaS, Agencies and more.

Exclusive benefits to ace your e-commerce game this 2023 with Locad’s desk calendar!