Tier 1 & Tier 2 suppliers refer primarily to suppliers of the automotive industry. A Tier 1 supplier supplies products (usually parts) directly to an OEM. The difference, then, is that a Tier 2 supplier supplies products to a Tier 1 supplier (who then supplies the parts to an OEM). In some cases a parts manufacturer can be BOTH a Tier 1 and Tier 2 supplier depending on who they are supplying parts to.