What To Know About Multi-Source Inventory?

What To Know About Multi-Source Inventory?

Multi-source inventory (MSI) is an outstanding feature that supports store merchants to control their single or multi-channel inventories and sales channels. Launching in 2018, it is designed to help ease the inventory management process from the admin panel. MSI is a highly recommended feature that retailers should utilize to better manage their eCommerce stores. In this article today, we would dive deep into the benefits of having MSI and what features it has to offer. 

The Benefits Of Having Multi-Source Inventory?

Multi-source inventory, MSI in short, allows retailers to manage all inventory sources without any third-party extensions or platforms. With MSI, it is possible to link multiple inventory sources to one or many websites. The amount of product added is calculated based on the sources made available for that website. 

Here are some benefits of using MSI: 

  • Enhancing physical locations management, sources, and its products
  • Increasing store sales efficiently and enhancing customer experiences thanks to better inventory visibility
  • Managing dropshipping easily
  • Supporting BOPIS (buy-online-pick-up-in-store)
  • Allowing retailers to make a separate shipment from different warehouses for one order with multiple items
  • Generating up-to-date inventory reports

Grouping multiple sources and defining the relationship between sources and web stores are done with a new concept called ‘stocks’. Additionally, we have a new term – salable quantity. It is in fact the total sum of the stocks, which updates immediately when a sale is processed. Also, we have source selection algorithms, to deduct the source of a product right after a shipment is created. 

multi-source inventory in businesses

Things To Know About Multi-Source Inventory


A source is a place where the product is located, which is a primary element of inventory. It can be a physical location such as a warehouse, brick-and-mortar stores, or distribution centers of a product.  In an eCommerce store, the source is added and then retailers can set the quantity of the available products per any single source. 

multi-source inventory


The term ‘stocks’ is used to group multiple sources together. Stocks map your sources to sales channels, providing a direct link to salable quantities and inventories. While sources are actual physical locations, the stocks are the virtual representation for multiple sources. 

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The main difference between Sources and Stocks is that Stocks can be deleted. However, Stocks can’t be disabled which means any sales channels and sources cannot be reassigned once they are removed. If deleting a Stock is not what you want, you can choose to edit it. Users can change everything, from the Name, the sales channels, and the assigned sources. 

Merchants should remember that they can only do it with New Stocks, not the Default Stocks setup by the eCommerce platform. Additionally, if you unassign a sales channel without adding it to another custom stock, it will be assigned to the Default Stock. 

goods for business

Partial Shipments

MSI also supports partial shipments. When creating a shipment, it is possible to choose how many items within an order. If users send partial shipments, each shipment deducts that amount from your product quantity. Any remaining reservations remain in place until they are also shipped at a later time. This keeps the salable amount current. 

multisource inventory

Source Selection Algorithm

source selection algorithm

An MSI uses the Source Selection Algorithm to do multiple works for their users, from tracking inventory salable quantities across all sources to making recommendations for partial and full shipments. Whenever retailers change a salable quantity once a new order is placed and paid, the algorithm will run and do these below works: 

  • Calculating the salable quantity of all assigned sources per stock
  • Subtracting the out-of-stock threshold amount from the salable quantity
  • Reserving inventory quantities at checkout, deducting form in-stock inventory at order processing and shipment
  • Supporting backorders with enhanced options for negative thresholds

Wrapping Up

In this article above, we have discussed some basic information about the multi-source inventory system. At ConnectPOS, we also have our own MSI system which compatible with multiple eCommerce platforms, support purchase order management, and vendor/supplier management. Please feel free to reach out to us if you have any further questions! 

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