tracking of a third party svn repository

I am a svn newbie, and I am sure this must be
common knowledge, but I was not able to find
an answer, despite googling the words in the subject.

So: I want to track third-party software, which is
mantained in a svn repository, making my local
modifications, but tracking their updates.

I read about vendor branches
http://svnbook.red-bean.com/nightly/en/svn.advanced.vendorbr.html
but this seems to cover the case where
the upstream package is not available via a
repository. As I understand it, svn_load_dirs.pl in particular
is meant to load unversioned trees into your own
repo.

But if I load a third-party package into my own
repository, with svn:externals maybe, then
I cannot do any merge operations, right?

I am sure I am missing something trivial. What is the
normal way people handle this situation?

Thanks very much in advance,

Ewout ter Haar

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