1. Log into Joomla Administrator
2. Select "Component -> Virtuemart" from top menu.
3. In left menu: "Products -> Add Category"
4. Checkmark "Publish"
5. Type Category name.
6. Click Save. Note the "id" number for the newly added category as seen in the right-most column under "ID".
7. In Joomla Administrator top menu, select "Menus" and then the menu in which you want to link to this new category.
8. Click "New" for new menu. For menu type, select "Virtuemart"
9. Type menu title for the new category.
10. Select the desired "Parent Item".
11. Expand the "Parameters (Component)" right panel and put the category id number in the "Category ID" field.
12. Click "Save". Now you should see new category menu in the menu.
13. Now add new product and select that product into the new category.