For every digital and physical product in your catalog, you need to create a SKU and provide its identifier when creating or updating a Checkout. This is true whether fulfillment of the product is coordinated by Digital River or handled by a third-party.
On the other hand, you only create inventory items when you need to represent physical products whose fulfillment Digital River coordinates. In these cases, you'll need to maintain SKU/inventory item pairs.
In the retail word, stock keeping units (SKUs) represent a unique set of numbers and letters that are used to identify, locate and track your product. They typically provide information on the most important characteristics of an item. SKUs aren’t meant to be universal. They’re almost always unique to your business.
In the Digital River API, the SKU resource can represent both physical and digital goods. For every product in your catalog, whether you intend Digital River or a third-party to coordinate its fulfillment, you need to use the SKUs API to create and update these objects. So, before generating checkouts and orders, we recommended that you define and catalog all of your SKUs.
An inventory item represents a physical good whose fulfillment Digital River coordinates. So, for each product in your catalog that meets these conditions, you need to create an inventory item, a corresponding SKU, and then ensure the two objects are synched.
Once you've created an inventory item, you can use the Inventory Levels API to determine when, where, and how much of the product is available.
And when you're ready to initiate a Digital River coordinated fulfillment, wait until you've received the appropriate events, and then use the applicable inventory item identifiers to create a fulfillment order using the Fulfillment Orders API.