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    Last Updated | March 29, 2022

    Magento is a leading platform for eCommerce brands to upscale their productivity, and they have been launching advanced features. One of them is known as Multi-Source Inventory. It’s a massive leap for Magento users that significantly enhances the inventory management systems for online stores. That’s because it allows the eCommerce business owners to control sales channels and the inventory for multiple and single stores.

    Before this feature, Magento only had one stock source, while the latest version empowers the eCommerce merchants to optimize inventory management, irrespective of warehouse and customers’ location. Also, you don’t need to worry about the sales channel and products either. Still, this is a new feature, and below we are sharing a complete guide with you!

    What Is Magento 2 Multi Source Inventory (MSI)?

    As the name suggests, Magento 2 Multi Source Inventory is known as the latest inventory management module designed by Magento, and it supports inventory management from multiple store locations. Currently, the codebase of Magento has over 483,254 PHP code lines, while MSI has only 46,844 PHP code lines. This extension also delivers business solutions for enhancing inventory management.

    That’s because it enables the store admins and owners to manage the inventory from different locations (it can work with a single location as well). With MSI, the store owners will receive improved checkout protection. In addition, inventory management helps bring in more sources and stocks because it increases channels related to new deals.

    Not to forget, it can monitor the checkout processes that are brought in through the source choice calculation. As a result, the merchants will be able to improve the checkout page and reduce the abandoned carts on the store. With the help of MSI, the store admins can easily manage the stocks while complying with various distribution center areas.

    MSI has the capacity to support different product types efficiently. Moreover, MSI can support automatic product shipments from various locations to complete the order (the orders that are based on balanced inventory and shipping costs). On top of everything, it allows the admins to perform single-sourcing and multi-sourcing groups.

    According to the available shipping options, the store admins can develop multiple sources and locations, irrespective of warehouses or storefronts. They can associate the stocks to the sales channel to ensure precise management. MSI can help online merchants re-deal with the sources that can match shipment requirements. What we love about MSI is that it can also license the requests for different locale shipping.

    On top of everything, the store owners can update, move, and track the stock for every source while setting the notifications for available and non-available inventory. It can help develop a customized algorithm for every order while complying with the sales channel. Lastly, it can be integrated with third-party warehouse management systems through APIs.

    This feature is available in the 2.3.0 version of Magento and has become an ultimate option for store owners to control the sales channels and inventories. To top it all, online merchants can manage everything through the admin panel of Magento 2, so what more could a store owner need?

    What are the Advantages of Magento 2 Multi Source Inventory?

    Before you call in the Magento 2 development company, it’s essential to understand the advantages of the Magento 2 Multi Source Inventory. When compared to version 2.2, you will get the following benefits;

    • The Magento store owners can assign the quantity and product to every fulfillment source, such as a store, warehouse, third-party drop shippers, and distribution centers. As a result, the inventory management will be streamlined
    • The MSI has the capacity to track the inventory while easing the inventory process management and handling
    • MSI is a perfect feature for streamlining the operations while controlling the sources and prioritizing better sources that are supplied for real-time website management
    • MSI offers easy third-party app integration to improve the inventory handling
    • The store admins will be able to improve the physical location management in the form of products and sources
    • Proper utilization of MSI will improve the customer experience and enhance the sales funnel since it delivers higher inventory visibility. In addition, it can optimize the checkout process
    • The store admins can get the updated and accurate inventory reports while managing the dropshipping aspects
    • The store admins will be able to organize separate shipments for customers who need one product in advance (if they have placed an order for multiple products) through quick delivery platforms
    • There will be an increase in traffic and improve customer experience through “buy online & pick up in-store.”

    Here, it’s important to note that MSI is ideally suited for all online merchants, even if they have a single inventory source since it will allow them to track the salable stock deductions. As a result, tracking the checkout performance will be easier and accurate. Lastly, it can show the exact number of stocks available in the inventory, which eventually saves time for sellers and buyers.

    How to Implement Multi Source Inventory in Magento 2?

    When it comes down to the Multi-Source Inventory, it can be easily integrated into Magento 2.3.0 version. In this section, we are sharing the implementation instruction for the store admins;

    Step Number One 

    Step one is all about source management because the source is the ultimate element of every new inventory. The source represents the physical area where a product is situated. The location can be a distribution center, warehouse, drop-shipper, or brick-and-mortar store. The store admins can add a new source and choose the available product quantity for every source (even if it’s single). In the section below, we are sharing the instructions for adding a new source;

    • Open the admin panel to go to inventory by selecting the store’s option
    • From the inventory tab, click on sources, and the source grid will show off the enabled default sources. If you are using a single source code, every product is assigned to the name by default
    • Now, tap on the “Add new source,” and you may enable the multi-source mode; if there are different locations
    • Next, just open the general tab, enter the product name, code, GPS location, and description of every source (code and name are essential parameters of every source while description will only be available on the backend)
    • Lastly, open the source’s address and contact information in the contact info tab. Lastly, just hit the save and continue button, to save the configuration.

    Step Number Two

    Step two is about managing the stocks, and the stocks will map the sales channel for outlining the available inventory and source locations. The sales channels are restricted to the Magento website, and the stocks can be assigned on different websites, and every sale channel will be connected to one stock. In the section below, we are sharing the steps for managing the stocks, such as;

    • Open the stores, scroll down to inventory, and open stock
    • Look for the default stock (it cannot be disabled), and the default stock will be assigned to the main website and default source with single-source mode
    • Now, tap on the “add new stock” for enabling the multi-source mode
    • Then, enter the name in the respective field, choose the sales channel, and assign the specific source

    Step Number Three 

    This step is all about managing the catalog product inventory and helps attach sources to the products. In the section below, we are sharing the instructions for you;

    • Open the catalog and scroll down to products
    • Move down to the action column and press the “edit” button to open the edit page of the product
    • Now, scroll down to the source section and tap on the assign button
    • From this page, select the sources that you have to assign and hit the done button (you can also outline the stock status, quantity, and low stock notification information)

    Step Number Four 

    Whenever some customer places an order, the salable product quantity will reduce, but the product count remains the same. This is because the product count will reduce only when the shipment or order is fulfilled.

    Step Number Five 

    This is the last step and is about managing the search selection algorithm. The search selection algorithm uses data about products, customers, stock, address, delivery location, and sources to help merchants which orders can be transported while ensuring the high product margin.

    What Are the Features of Magento 2 Multi Source Inventory?

    • Source Management

    Source management can check the product stock wherever the products are shipped from and are stored. It allows the store admins to create manual sources for every location of products. The users can then set the available product number for every source in the configuration menu of products. Not to forget, the sources can be added and edited in the backend.

    • Stock Management 

    The store owners will have access to channel assignments for every group and multiple source grouping with this feature.

    • Source Selection 

    This is an algorithm designed with MSI and allows online merchants to choose the physical location closest to the customers and develop a shipping location.

    • Manage Catalog Product Inventory

    This feature is related to stocks because you eventually have to assign a source for each product. In addition, the store owners can allocate available quantities for every product. For this purpose, they have to switch on the “notify quantity” option, which means you will get a notification when product stock starts running low. In simpler words, it helps with inventory management.

    • Saleable Quantity

    MSI has systematic steps since you’ve to create a source, allocate the stocks, determine the product quantity, and every store is connected to the website. When these steps are completed, the module will automatically evaluate the product to deliver a saleable product quantity. Whenever the customer places a new order, the module will deduct the product quantity and send an alert notification.

    In addition, it notifies the action change. Consequently, “out of stock” will appear when the product quantity is zero. That being said, the customers will be informed about the limited stock if they want to buy more than available stocks. It can enhance the performance through system offloading.

    • Order Management

    When the orders are placed, the feature will reserve the ordered product until the order is fulfilled. Moreover, shipping will be provided when the payment gateway is complete. Consequently, the purchased product quantity will be detracted from the source quantity. It has a source selection algorithm as well (it has to be manually decided).

    What Are the Magento 2 Multi Source Inventory Related Products?

    The MSI features are opening up new arenas for technology partners for developing the integrated functions. The merchants will gain benefit from default functions while exploring advanced features.

    •  Integration of Magento POS with MSI

    This related product is a perfect combination of an online to offline system for Magento store admins. It allows the users to sign in to the POS checkout from a single link because you only need a browser (no, you don’t even need an internet connection because the offline mode is available). In addition, the inventory can be synchronized in real-time between the backend and web POS. Not to forget, the POS functions will help connect to MSI data and showcase the inventory from the stock. Lastly, it can update the POS orders to backend systems.

    •  Advanced MSI 

    This is the plugin that helps improve the MSI functionality. It can deliver flexibility to have virtual and physical stocks (even if the logistics are complex). The advanced MSI helps manage everything within the Magento environment while picking the suitable warehouses (the location is chosen according to stock availability and closest location). The advanced MSI algorithm can combine picking options, and the websites can be linked to specific stocks.

    Important Terms to Understand with MSI

    Before you start using Magento B2B development or Magento integration services to integrate MSI, there are some terms that you need to understand, such as;

    • Source –this is the stock place and location where the products are saved. The location can be anywhere, such as storefronts, warehouses, and distribution places. The sources cannot be edited.
    • Stocks –this is the virtual representation of different sources, and the sources can be mapped for every sale channel. It can help create a link to salable inventory and product quantity. The stocks can be edited and deleted
    • Salable Quantity– it is defined as the total sum of available resources that are gathered in the stock
    • Source Selection Algorithm– this algorithm can track the salable product quantities across different sources. In addition, it calculates the sources and makes suggestions regarding shipments while ensuring a higher profit margin. The algorithm works by using customer, address, product, source, and stock data

    Installing Magento 2 MSI is pretty convenient as the product can be downloaded right from the Magento store. However, installing Magento 2 MSI can be challenging for beginners. For this purpose, you should hire Magento or Shopify design services (both can help due to similarities in the functionality and installation process). These professional design services have specialized knowledge to install Magento 2 MSI on your store without causing any disruptions.

    Final Words

    To summarize, MSI can optimize inventory management features in Magento 2 infrastructure. It can link different sources to the Magento store while an algorithm is used for selecting the source based on different conditions. Sure, other third-party plugins are available to provide similar features, but this is the out-of-the-box feature that doesn’t have any compatibility issues, so when will you implement MSI?


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    About

    Folio3, a Software Powerhouse established in 2005, is one of the leading eCommerce solution providers for SMBs and Fortune 500. The Company has expertise in diverse industries such as Animal Care, Retail, Automotive, Food and Agriculture, and Health care. From ecommerce store design and development to full-scale ERP deployment and integration, Folio3 has done it all.