Question

There are advantages to doing business with just one vendor, and you should always stick to just one if you can

Answer 1

False.

The advantages from 1 vendor to 1 business relationship is that the trust implicit in the contract is stronger as both parties need each other to gain. Logistically there are obvious advantages to the only use of 1 vendor, but the disadvantage is the power that is gained by the vendor in front of the business.

This means that if a company only uses one vendor, but this vendor provides to several companies. Then, if the vendor decides to charge a higher price for the goods or services the company will have to accept as it does not have another vendor to get the goods or services from.