What is a vendor?

Point of Sale (POS) Glossary

A vendor supplies goods to a merchant. Vendors may include wholesalers, manufacturers, and resellers. A business makes its profit by marking up items they acquire from vendors and selling them to customers.

A factory generally makes the goods and sells them to wholesalers, who sell to resellers, which sell goods to a retail merchant. However, in cases where the end retailer may purchase large amounts of product, they can deal directly with a wholesaler or manufacturer.

When retailers sell merchandise directly to customers using a point of sale register, they usually sell only a few items at a time and charge sales tax. In cases where a merchant sells to someone who will resell, they become that company’s vendor, and a POS system can be configured to complete the transaction without charging sales tax.