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Third-party vendors exist across the economy: in goods and manufacture, retail servicing, and internet hosting, for example. In the goods and manufacture sector, third party vendors are companies, including major brands, which obtain assemblies, components or other products and either integrate them into their own unique product or resell the products they've procured to customers or companies. They sometimes will modify the products they obtain and add their own brand.

There are numerous widely known examples of TPV's:

1. Computer Vendors - HP, Gateway, Sony, Toshiba, etc., are all 3rd Party Vendors. While they are sometimes called OEM's (Original Equipment Manufacturers) that term only applies to the actual systems they sell under their own name, and even that is really incorrect. They don't "manufacture" anything - they procure components from many different OEM's (NVIDIA, Seagate, Intel, etc.) and ASSEMBLE those components into a final system. In this case "Manufacture" is a relative term; one could argue that since it's a uniquely designed system, it's been "made" or manufactured. However, the literal definition of manufacture means to build something made from raw materials by hand or by machinery. Using that definition, the term doesn't apply to TPV's.

2. Third-party vendors work in many parts of the retail and service sector of the economy. A major product (Intel or Panasonic) or service (H&R Block or Comcast) brand may contract with a third-party vendor to assist in staff training and sales assistance in chain retail stores, or may be hired directly by chain retailers to assist with sales and product training and assisted sales. The third-party vendor hires its own field force, often as contract employees, who work in stores independent of store management, but working in close association, to help improve store sales, train store employees, and assist and educate customers. The contracting brand generally provides training to third-party vendor employees prior to each assignment roll-out and works with vendor management to determine geographic coverage, scope of the project, and to set goals and objectives. The vendor's field force may then train store employees on the features of particular brands in comparison to the competition, new products or features, and on sales approaches; and in cooperation with store managers assists in-store sales by educating customers and setting up sales opportunities for store sales staff. In-store field reps also vendors also inform management and staff of brand online training opportunities that often offer incentives such as free merchandise or significant purchase discounts, and of sales contests that can benefit both the store and the individual employee. Third-party vendors may also be hired to create or change sales displays and conduct selective inventory of products in stores or to conduct major conferences, meetings or training. Another major third-party vendor service is full-store inventory.

3. Third-party vendors obtain and sell sales leads to insurance and other sales professionals, and often also provide training, sophisticated paperwork administration, direct mail and other support services especially valuable to independent sales professionals.

4. Internet ISP's/Hosting sites - Most hosting companies on the internet are actually 3rd party vendors/resellers. There are actually very few hosting server facilities in the country; most companies you see on the 'net are resellers for the space that the larger company is selling. They typically add their own brand name and pricing to the server space and other services bought from the larger company.

AnswerHmm I'm surprised this question has not being asked yet.. it must be one of the most common in Procurement. I will attempt to ask...

A Third Party Vendor is simply a supplier that provides goods and services that will inturn be supplied to the customer.


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โˆ™ 2011-02-19 06:53:59
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Q: What is a third party vendor?
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