Modern day businesses use their logo everywhere - letterhead, invoices, websites, merchandise (t-shirts, mugs, etc.), billboards, vehicle vinyl wrap and much more. Obviously, the physical size of the logo on each one of these is very different.
If you only have your logo in raster file format, you will not be able to use that file for larger products. Raster files are typically JPG, GIF, PNG and BMP. There are others, but these are the most common types of raster images people use for general logo purposes on smaller scale projects - such as letterhead or websites.
Raster images are made up of small dots (called pixels), much like newspaper print. So, if you enlarge it, it will become blurry and distort. To avoid this problem, a vector image must be used. Vector files are made up of mathematical points which can be scaled infinitely without loss of quality.
Vector images are available in many different formats. AI, EPS, PDF, SVG, DXF and others. Depending on the use, a specific format may be required. For example, you want some t-shirts with your logo on it to hand out to customers for promotional gifts. You call your t-shirt company, and they say they require your logo in AI or EPS format. But you only have a JPG. This is when you would need to have your JPG converted to an AI or EPS file.
Some vendors may not work with vector files (although rare) - they may say they need a JPG at 3000 pixels in width - the only one you have is 400 pixels in width - if you enlarge it to meet their requirements, it will be blurry and most likely unusable.
This is where vector files shine! Think of your vector file as your "master file". If you have a vendor that wants a vector file - easy! Just send them your vector file - no matter what your project size requirements are, all they need is your vector file. Now let's say the vendor needs a larger JPG file - if you have your logo in vector format - no problem! Vector files can be exported (with the proper software) at any size in raster format. Now you could send them your logo in JPG format, at 3000 pixels in width with ZERO distortion or blurriness!
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