What is the 1-creditor model (single-creditor model)?

A large number of suppliers offers buyers many potential sources of procurement. This strengthens competition and thus increases the chance of favorable prices from the client's perspective.

The disadvantage of this type of procurement, however, is that many suppliers also mean many creditors. This leads to expensive and complex supplier management. This is particularly true for companies with extensive requirements.

The single vendor model (also known as the one-vendor model) can reduce this high administrative effort and the associated process costs. The basis for this is a vendor who receives the orders, forwards them to the suppliers and handles the financial settlement between the parties involved.

The process is as follows: the purchasing department places its orders via a single vendor. The vendor forwards the order to the supplier. The supplier fulfills the order directly with the customer. Once the order has been fulfilled, the supplier sends the invoice to the one vendor, who then pays it. The vendor then acts as the sole invoicing party vis-à-vis the procurer. This means that there is only one vendor for the purchaser. Hence the name 1-vendor model.

Advantages of the single vendor model for suppliers

Many companies are now striving to reduce their vendor base. Regardless of the size of the supplier pool, the single vendor model means there is only one point of contact in the procurement process. This significantly reduces the workload for the purchasing department.

Advantages of the single vendor model for buyers

Due to the tendency for companies to reduce their supplier base for cost reasons, suppliers must make greater efforts to acquire new customers. This is where the single vendor model can pave the way. The network behind it allows contact to be made with participants who could not be reached in any other way. Furthermore, suppliers benefit from similar advantages as the purchasing department (see above). In addition, a single vendor system offers them the advantage that the invoice is processed on time and directly with the vendor.