What is multisource inventory?
Multisource inventory is a feature allowing merchants to have multiple warehouses to accommodate their stores (e.g., one or more websites). Having multiple places to store inventory helps to beat the burden coming from the high number of orders. It has recently introduced as a feature in Magento 2.3 (which is called MSI).
Merchants now can ship products to customers from more than one location. For example, a business has 3 websites in the US, Spain and Japan with 3 corresponding warehouses on 3 different continents. By doing so, it is easier for merchants to assign the nearest source to a website that matched the location.
The number of source locations depends on specific markets, customer demands, costs and so on.
Terms in multisource inventory management
- Source: This is a place where products are stored, which can be a warehouse, brick-and-mortar store, or distribution center. In MSI, products being sold in different locations can have a specific inventory based on that place.
- Stocks: Stocks are the virtual groups of multiple sources, which are used to map sources to selling channels.
- Partial shipments: This is the delivery of one order that comes in multiple shipments. Partial shipments make sure that product quantity remains in place until they are actually shipped.
- Source selection algorithm: It supports multisource inventory management, by tracking salable quantities across all sources and making recommendations for shipments.
Benefits of multisource inventory
Multisource inventory helps businesses to manage multiple inventory sources without the help of any third-party company. Some of the most visible benefits are:
- Increase sales by providing sufficient product quantity and timely shipment
- Support curbside pickup (buy online and pick up in-store)
- Enhance customer service with better inventory visibility
- Save administration costs
- Support stock control (e.g., notifying merchants about stocks running low)
