What is an intermediate consumer?

An intermediate consumer refers to a business or entity that purchases goods and services to process them into finished products or sell them to the next tier in the distribution chain. While raw materials are indeed important components of this process, the defining characteristic of an intermediate consumer is their role in the supply chain rather than directly serving the end consumer.

In this context, a vendor processing end products, which could include manufacturers, fits the definition of an intermediate consumer as they take raw materials and transform them into products meant for sale, distinguishing them from final customers who consume the product as their end use. Retailers also fall into the category of those selling to consumers, which identifies them as part of the sales process but not as intermediate consumers in the manufacturing aspect. Thus, interpreting the term 'intermediate consumer' through the lens of the supply chain helps clarify their function as essential facilitators in delivering final products to consumers.