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Vendor vs. Contractor: What's the Difference?

By Janet White || Published on December 5, 2023
A vendor sells goods or services, often in small quantities; a contractor provides specialized services under a contractual agreement.

Key Differences

Vendors typically engage in the sale of goods or services to consumers or businesses. While, contractors are professionals or companies hired to perform specific tasks based on a contract.
The relationship with a vendor is often transactional and short-term. In contrast, contractors usually have a longer-term engagement defined by the terms of a contract.
Vendors can range from small-scale sellers to large suppliers. Contractors, however, are often skilled individuals or firms specializing in particular services or projects.
Vendors operate in a variety of marketplaces, including retail, wholesale, and online platforms. Contractors typically work in fields like construction, IT services, and consulting.
Payment to vendors is generally made per purchase. Payments to contractors are often milestone-based or upon completion of contracted work.

Comparison Chart

Nature of Service

Sells goods or services
Provides specialized services

Relationship Duration

Often short-term and transactional
Longer-term, based on contract

Type of Work

Retail, wholesale, supply of products
Construction, IT, consulting, specialized tasks

Skill Set

Varies, from basic selling to expertise in a product
Requires specific skills or expertise

Payment Terms

Per transaction or sale
Milestone-based or upon contract completion

Vendor and Contractor Definitions


Vendors operate in various marketplaces, including online and physical stores.
We ordered office supplies from an online vendor.


A contractor works on a contractual basis, often for a specific project.
The landscaping contractor will design and execute the new garden layout.


A vendor is a person or company offering goods or services for sale.
The vendor at the farmers' market sells fresh produce every weekend.


Contractors often specialize in fields like construction, IT, or consulting.
We hired an IT contractor to update our computer network.


Vendors can range from individual sellers to large corporations.
We have multiple food vendors at our annual festival.


A contractor is a person or firm hired to perform specific tasks under a contract.
The contractor was hired to oversee the office renovation project.


A vendor can be a supplier in a supply chain.
Our company's main electronics vendor provides all our computer hardware.


Contractors are usually paid based on milestones or project completion.
The construction contractor will receive payment upon each project phase completion.


Vendors may sell directly to consumers or to businesses.
The coffee vendor in the lobby caters to both employees and visitors.


Contractors can be independent individuals or part of a contracting firm.
An independent contractor was hired for our marketing campaign.


One that sells or vends something
A street vendor.
A vendor of software products on the Web.


One that agrees to furnish materials or perform services at a specified price, especially for construction work.


One that provides products or services to a business for a fee.


Something, especially a muscle, that contracts.


A vending machine.


A person or company that builds or improves buildings.


A person or a company that vends or sells.


A person or company that performs specific tasks like electrical or plumbing work in construction projects.


A vending machine.


A person or company hired to maintain existing facilities like air conditioning systems, groundskeeping, etc.


To bundle third-party dependencies with the source code for one's own program.
I distributed my application with a vendored copy of Perl so that it wouldn't use the system copies of Perl where it is installed.


A person hired to do a job on a business contract, as opposed to a permanent employee.


As the software vendor, to bundle one's own, possibly modified version of dependencies with a standard program.
Strawberry Perl contains vendored copies of some CPAN modules, designed to allow them to run on Windows.


One who contracts; one of the parties to a bargain; one who covenants to do anything for another; specifically, one who contracts to perform work on a rather large scale, at a certain price or rate, as in building houses or making a railroad.


A vender; a seller; the correlative of vendee.


Someone (a person or firm) who contracts to build things


Someone who promotes or exchanges goods or services for money


The bridge player in contract bridge who wins the bidding and can declare which suit is to be trumps


(law) a party to a contract


A bodily organ that contracts


Do vendors need special qualifications?

This depends on what they are selling; some may need expertise or licenses.

Can a vendor be a contractor?

While their roles are different, a vendor could also work as a contractor under certain conditions.

What is a contractor?

A specialist hired to perform specific tasks under a contractual agreement.

Are contractors always individuals?

No, contractors can be individuals or businesses specializing in specific services.

What is an example of a vendor in a business setting?

A company supplying office stationery is a vendor.

What is a vendor?

A person or business that sells goods or services.

Do contractors sell products?

Their primary role is providing services, though some may also supply related products.

How are contractors usually paid?

Typically based on project milestones or upon completion of work.

Can vendors operate online?

Yes, many vendors sell their products through online platforms.

Can vendors have long-term relationships with clients?

Yes, especially if they provide regular supplies to businesses.

Can a contractor work for multiple clients simultaneously?

Yes, if they can manage their schedule and contract terms allow it.

Do contractors need insurance?

Often yes, especially in fields like construction for liability and risk management.

How does a vendor make a profit?

Through the sale of goods or services, often marked up from their cost.

What’s the typical duration of a vendor's transaction?

It's usually short-term, like a one-time purchase.

How important is customer service for a vendor?

Very, as it can impact repeat business and reputation.

What kind of projects do contractors handle?

They handle specialized projects, like building construction or software development.

Is a contractor's work always project-based?

Mostly, but some contractors provide ongoing services under a long-term contract.

Do vendors provide after-sales services?

Some do, especially if it's part of their business model.

Are contractors usually experts in their field?

Yes, they generally have specialized skills or expertise in their service area.

Are contractors limited to construction work?

No, they work in various fields, including IT, consulting, and creative services.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.

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