Is It Time For a VMI?

What’s up everyone,

I look forward to this week all year. It’s when I invite 30+ people to our HQ for the “Breaking $5M Workshop.”

This year’s event was one of the best yet.

During the opening hours of the workshop, we toured the building. The highlight—like it is most of the time—was the VMI.

I answered a lot of questions and realized that many are interested in taking this path. While most of you probably think you’re too small, I’m guessing that’s not the case across the board.

Before we talk about all things VMIs, I want to introduce you to Quick Staffers, the easiest way to hire off-shore talent for your home service company.

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The VMI Flex

Most vendors sell inventory. Some build full branches inside your business.

The latter is what a VMI is. Vendor managed inventory.

Instead of carrying your own materials, a vendor sets up shop inside your branch. Their products, their people, their space (inside your space). You don’t own anything until you buy it across the counter.

You get the access without the risk.

That’s what I call “the VMI flex.”

And when you’ve got two VMIs running in your operation like we do (second one opening next week)? That’s not just smart. That’s scale.

This setup doesn’t just look good. It frees up capital, removes inventory risk, and tightens vendor relationships in ways that are hard to match.

Here’s a podcast episode of mine where I talk about VMIs, vendor relationships, and more.

What Actually Happens Inside a VMI?

A VMI isn’t just a shelf with vendor products. It’s a fully embedded branch inside your operation.

Here’s what’s behind the gate:

• All inventory belongs to the vendor—until you buy it.

• The staff running the counter are vendor employees.

• You don’t deal with restocking, logistics, or PO management.

• Your team walks in, grabs what they need, and it hits your books only when purchased.

And because it’s inside your building, access is instant. No driving to supply houses. No waiting on deliveries.

What Does It Cost to Set Up a VMI?

Here's the kicker: it doesn’t cost you much upfront.

The vendor handles:

• Inventory investment.

• Staffing and payroll.

• Setup and shelving.

• Technology or POS systems.

• Replenishment logistics.

Your responsibility? Volume and commitment.

You need to:

• Guarantee a certain purchase volume (monthly or annual).

• Provide physical space in your facility.

• Offer consistent demand to justify the embedded setup.

If you're a $2M+ business (sometimes even less), vendors will take that seriously. And for you, it means zero capital tied up in stock you might not need.

Our Move to 2 VMIs

Most businesses operate with a single vendor relationship. One VMI is efficient. But two?

That says your volume is high enough—and your ops are dialed enough—to support multiple full-time vendor branches inside your business.

I like to think about it like this: We don’t have inventory anymore unless we buy it. That’s a good feeling.

The question isn’t “Should I get a VMI?”

It’s: “Are you big enough for one—or maybe even two?”

Because when vendors start opening branches inside your business, it’s not just logistics anymore. It’s cost savings. It eliminates hassles and stress. And it’s proof you’re building something real.

JackQuisitions: Your Playbook for Buying Businesses

Looking to scale your business through acquisitions?

Our newest podcast series, JackQuisitions, drops its first episode on May 2. Jack dives deep into the strategy, structure, and real stories behind buying and growing businesses.

Interested? Let us know…

That’s all for today, but I’ll be back next week with a full recap of the Breaking $5M Workshop.

Enjoy the weekend,

John

Disclosure: This newsletter includes sponsored content. However, all opinions expressed are entirely my own.

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