Magento 2 Multi-Source Inventory: Complete Guide

To manage your sales effectively, you need a full picture of the products you have in stock. But what if there is more than one inventory source? How can you track the availability of products through each of them and ship the products timely?

That's when Magento Multi-Source Inventory or Magento MSI comes in handy. In order to understand this concept of Magento and how it works, we will take a look at some of the most important features of this tool.

What is Magento 2 Multi-Source Inventory?

Magento 2 Multi-Source Inventory (MSI) is an upgraded tool that was released in Magento 2.3.0 in 2018. Basically, this new feature gives many efficient opportunities for merchants. It allows you to link multiple inventory sources to one or multiple websites, track the product quantity in each of them and manage your sales accordingly.

Initially, Magento had a Single-Source Inventory but they've decided to add some significant changes with the 2.3.0 release. There is nothing complicated. So, even users of the Single-Source Inventory will have no trouble managing MSI.

Using Magento 2 MSI you can:

  • operate more than one inventory source;
  • choose cost-effective shipments;
  • control stocks;
  • track the number of available products;
  • integrate a third-party inventory system;
  • assign a product to a certain source.

Features of Magento 2 MSI

For a better understanding of the MSI features, we will have to pay attention to some key terms. They thoroughly define the main capabilities of the MSI and make the process of working with them clearer.

The main terms and mechanisms:

  • Sources;
  • Stocks;
  • Product Inventory Configuration;
  • Salable Quality;
  • Search Selection Algorithm.

Sources

Magento inventory source is the physical location of the products. It may be a warehouse, drop shipper, storage unit, or even your house. It may be any place that is equipped for inventory storage.

If you sell products from different sources, you will need to create a source for each physical inventory location.

Magento 2 Sources

Besides, shipments and orders are connected to the sources. You can disable sources in Magento, but they won't be available for orders and shipments in this case.

Then you can organize your sources into stocks.

Stocks

A stock in Magento is a virtual representation of multiple sources. One stock may include multiple sources — you can organize sources into stocks in the most convenient way. Everything depends on the country, website, or any other criteria.

Magento 2 Stocks

Here you also have to assign one or more sales channels to the stock.

Note: one stock may be connected with multiple websites, while a sales channel can be assigned to one certain stock only.

Stocks cannot be disabled. But if there is a need you can reassign sources or sales channels.

Product Inventory Configuration

This is a new section that is represented on the product editing page when you use Magento Multi-Source Inventory. It allows you to add sources to the products and define quantity per each source. This way, it is easier to manage sales and organize shipments.

Assign Products Per Source

Salable Quantity

Salable quantity defines the sum of all products across multiple sources so you can be aware of how many products you have in general. This helps to avoid out-of-stock and dead-stock situations.

Salable Quantity Magento 2 MSI

Note: only the salable quantity decreases when someone places an order. The Quantity per Source gets reduced only after the shipment is finished.

If some product is canceled before its delivery, the ordered quantity is added back to the Salable Quantity.

Search Selection Algorithm

This algorithm is used to determine which source an order could be shipped the most effectively from with the highest product margin. It uses a wide range of information about sources, products, customers, stock, addresses, and locations.

There are two types of Priority algorithms provided — Source Priority and Distance Priority.

How to Implement Magento Multi-Source Inventory?

As we have mentioned above, the implementation of Magento MSI is not that complicated. You simply need to follow a few steps.

1. Create New Source

  • Navigate to the Stores > Sources and press the Add New Source button.

Magento 2 Sources

  • Fill in the General information.

Note: Name and Code are obligatory fields while Description, Latitude, and Longitude are optional. If the source will provide products as soon as they are available, select Enable.

New Source In Multi Source Inventory

  • Input Contact Info and Address Data.

Sources In Magento MSI

  • Press the Save & Continue button.

You can modify this information if needed. But the Code of the source cannot be changed.

Here you will also find the Default source which you cannot disable. All the products will be assigned to it as well, according to the Single Source mode.

2. Create New Stock

  • Go to the Stores > Stocks and press the Add New Stock button.

Stocks In Magento MSI

  • Create a unique Name and assign Sales Channels.

Magento 2 MSI Stocks Configuration

  • Assign Sources you want to have in this stock and press Done.

How To Assign Sources To Stocks

  • Save your stock.

Same as with sources, all the information about a stock can be edited later, except the Code.

Besides, there'll also be Default stock that you can't disable. According to the Single Source mode, the Default Source and the website will be assigned to the default stock.

3. Assign Products to Sources

Product Inventory Configuration within the product section enables you to assign sources to products. For that:

  • Go to Stores > Catalog > Products and start editing a product. Then in the Sources section choose Assign Sources.

Assign sources in Magento 2

  • Choose the source(es) you would like to assign a product to and press Done.

Magento Sources MSI

Don't forget to Save a product when you finish.

4. Bulk Edit Quantity Per Source

To effectively manage your MSI in Magento you also need to know how to edit quantity per source in bulk. Otherwise, you need to go to each product and edit the quantity per each source. Not only is it ineffective, but extremely time-consuming.

Update Qty per Source Magento 2

Magento Multi-Source Inventory is a powerful tool for effective product and sales management. It enables you to work with multiple sources, organize them into stocks, and track the amount available for purchase. Magento MSI also allows you to directly connect sources and products while the search selection algorithm ensures the most cost-effective shipment.

You can tailor the options of Magento Multi-Source Inventory to your business needs and benefit from easy inventory management.

  • What is Magento MSI?

    Magento MSI or Magento Multi-Source Inventory is a feature that allows merchants to manage multiple inventory sources, websites, and stocks without any third-party integrations.

  • How do I enable MSI Magento 2?

    To enable Magento Multi-Source Inventory you need to go to Stores > Inventory and create sources and stocks. After that, you just need to assign products to sources.

  • What are stocks in Magento Multi Source Inventory?

    Magento stocks are virtual representations of Magento sources.

  • What are Magento inventory sources?

    Inventory sources in Magento are physical locations where the products are stored and could be shipped from. It could be a drop shipper, warehouse, storage unit, or even your house.