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I am using Magento 2.1. I know Multi-store inventory is available in Magento 2.3. But now I need to add multiple sources for Magento 2.1. I couldn't find any blogs or information regarding this.

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You will have to either purchase third party extension or upgrade.

General info found here.

https://docs.magento.com/m2/ce/user_guide/catalog/inventory-merchant-type.html

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