Vendor-Managed Inventory
Vendor-Managed Inventory (VMI) is an arrangement in which a supplier monitors a customer's inventory and sales data and decides when and how much to replenish, within agreed stock limits.
Why it matters for ecommerce brands
Brands selling wholesale to large retailers may be asked to run VMI using the retailer's sales data. It can reduce stockouts but puts forecasting responsibility on the brand.
Common questions
- What is the difference between VMI and consignment?
- VMI is about who decides when to reorder: the supplier manages replenishment. Consignment is about who owns the goods: the supplier keeps ownership until sale. A program can use either one or both.
Cite this entry
"Vendor-Managed Inventory (VMI)." Fulfillment Lexicon, last reviewed October 16, 2026. https://fulfillment.wiki/glossary/vendor-managed-inventory/