A vertical marketing system (VMS) is a distribution channel structure in which manufacturers, wholesalers, and retailers operate as a single system. Unlike a traditional channel, where each member is independent, there is coordination and control in a VMS.
One channel member may own the others (Corporate VMS), have contracts with them (Contractual VMS – e.g., franchise), or have so much power that they must cooperate with it (Administered VMS). VMS provide greater efficiency and control over the channel.
