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Nowadays, most retailers have at least one brick-and-mortar store and an eCommerce website. These are two popular sales channels. The challenge here is creating a better inventory integration between these channels.

Benefits of Inventory Allocation using Magento MSI

What is Magento MSI and how it benefits retailers?

Magento MSI (Multi-Source Inventory) is a new inventory management solution that provides two different layers of stock:

  • Source stock, the stock that is physically in a source.
  • Aggregate stock, the virtual stock of what can be sold in a sales channel.

Basically, merchants can set-up a new source & new stock which is linked to both of their e-commerce store & physical store. That means all inventory on-hand will be allocated to the online & in-store channels. So when there is a new sales order on a channel, the inventory will be updated & synced to others. We recommend using POS software integrated into Magento. It’s better if that is a Magento native solution like Magestore Inventory system.

allocation inventory for omnichannel share

Shared-inventory for both online & in-store channels

Limit inventory for online sales channel

In some cases, merchants want to limit the inventory that will be allocated for online sales channels because they prefer in-store sales. The benefit here is that allows to saving inventory for the higher priority channel from which most of the sales are generated from. Therefore, merchants don’t need to stock too many items in the warehouse. It really helps them to reduce inventory costs.

How inventory allocation works in Magento MSI

For example, there are 30 items of Neck Cotton T-shirts in Location A.

  • 30 in stock
  • 10 will be allocated for both online channel & in-store
  • 20 will be allocated only for in-store

That means, you can not sell more than 10 items of the T-shirt via the website, and able to sell up to 30 items to in-store customers. Let see some situations happen below.

Customer Success - Magestore Case Study

Case 1: Customers bought 3 items through the website. The inventory will be updated.
27 in stock
7 for both of online channel & in-store
20 for in-store only

Case 2: Customers bought 5 items at the physical store.
22 in stock
7 for both of online channel & in-store
15 for in-store only

Case 3: Customers bought 7 items on the website.
15 in stock
No available item in the website (out-of-stock)
15 for in-store only

How to implement this solution with Magento MSI & Magestore POS

Based on the requirements of merchants & the power of Magento MSI, we suggest setting up sources & stocks as below:

  • Source A1 contains 20 items, links to stock POS-A
  • Source A2 contains 10 items, links to both stock Web-A & POS-A
  • Stock POS-A will be used for in-store (POS A)
  • Stock Web-A used for the online channel

Divide inventory of a location into two different sources.
Sold 3 items through the website.

Inventory allocation for omnichannel

Sold 22 items to in-store customers

To complete this setup, you can follow the easy steps below:

 Step 1. Create Source A1 & Source A2 in Magento Backend.

Magento sources

Magento sources in the backend

Step 2. Setup Stock Web-A which links to Source A2 & Magento Website.


Stock Web-A links to the website

Step 3. Setup Stock POS-A which link to both of sources A1 & A2.

Stock POS-A links to both of Source A1 & A2

Stock POS-A links to both of Source A1 & A2

Step 4. Link POS A to stock POS-A.

POS A links to Stock POS-A

POS A links to Stock POS-A

Book a live demo for this solution

If you would like to explore more detail of the solution for omnichannel inventory allocation in the brick & mortar store, we are more than happy to provide a free live demo.


Read also: The Report Success – Magento 2 Inventory Report

Kate N.

Author Kate N.

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