Vendors and Suppliers are both outside companies used for purchasing goods. The difference lies in what those goods are being used for.

Vendors in the system are for outsourced purchases and work. They are an external third party contracted by the print shop to which they can shift jobs, operations, and other processes. For more information on outsourced purchases and work, see Items - Outsourced.

Suppliers in the system are the companies that you purchase stock and materials from, whether it is stock or finishing supplies. 

For information on vendors and suppliers, see Settings - Vendors/Suppliers.