What Are Suppliers
Suppliers are individuals or group of person that are accountable for providing goods and services to vendors and they get compensation from vendors. They do not interact directly with customers they are intermediary between customers and vendors. Since they provide the goods in large quantity or in bulk so they provide discounts to shop-keepers. If the contract between vendor and supplier is for long time then discounts are also provided.
The most common type of suppliers is whole-sale suppliers they are responsible for the manufacture and supply of required products to their client. The suppliers are found in all fields. Some companies also do niche market in this they import and export cultural, ethics or any other products. 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.
The main strategy of suppliers is to provide discounts to vendors but the discount is provided on the basis of quantity ordered. For a particular quantity fixed price is charged but after a particular price discount is provided to them. For example 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 provide a fixed discount to vendors for certain quantity when that quantity is ordered fixed discount is provided this makes discount process quite easy but there are some suppliers which provide discount after the vendors enter into a contract which can be for 2-5 years and they commit to vendor to order minimum number of units between this period. If the vendor is not able to purchase that much amount then some penalties can be charged.