Today most of the retailers have at least one brick-and-mortar store and an e-commerce website. They are two of popular sales channels. The challenge here is creating better inventory integration between these channels.

Magento MSI (Multi-Source Inventory) is a new inventory management solution which 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 a POS software which integrated to Magento. It’s better if that is a Magento native solution like Magestore POS.

Shared-inventory for both online & in-store channels

Limit inventory for online sales channel

In some cases, merchants want to limit the inventory will be allocated for online sales channel because they prefer in-store sales. The benefit here is that allows to saving inventory for the higher priority channel 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 cost.

How inventory allocation works in Magento MSI

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

  • 30 in stock
  • 10 will be allocated for both of 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.

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

Base on the requirements of merchant & power of Magento MSI, we suggest to setup sources & stocks as below:

  • Source A1 contains 20 items, links to stock POS-A
  • Source A2 contains 10 items, links to both of stock Web-A & POS-A
  • Stock POS-A will be used for in-store (POS A)
  • Stock Web-A used for online channel
Divide inventory of a location into two different sources
Sold 3 items through the website
Sold 22 items to in-store customers

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

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

Magento Sources

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

Step 4. Link POS A to stock POS-A.

POS A links to Stock POS-A

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.


Alex is the CTO & Co-founder of Magestore which has been providing retail solutions for Magento merchants since 2009. He started as a Magento developer just one year after the release of the first version of Magento. With over 10 years experience of working with Magento and clients all over the world, he gained great knowledge on e-commerce development, order management systems, inventory control & retail POS.

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