diff --git a/bitcoinstore/inventory/exceptions.py b/bitcoinstore/inventory/exceptions.py
new file mode 100644
index 0000000..eef5dd1
--- /dev/null
+++ b/bitcoinstore/inventory/exceptions.py
@@ -0,0 +1,10 @@
+class ItemNotFoundException(Exception):
+    pass
+
+
+class InsufficientInventoryException(Exception):
+    pass
+
+
+class AlreadyExistingInventoryException(Exception):
+    pass
diff --git a/bitcoinstore/inventory/fungible_item.py b/bitcoinstore/inventory/fungible_item.py
new file mode 100644
index 0000000..6d43f55
--- /dev/null
+++ b/bitcoinstore/inventory/fungible_item.py
@@ -0,0 +1,14 @@
+
+class FungibleItem:
+    """
+    A class object to hold contents of a row of fungible_inventory database.
+    This is the object returned from the DAO, and to clients of the InventoryService.
+    """
+    def __init__(self, sku = '', name = '', description = '', price_cents = 0, shipping_weight = 0, quantity = 0):
+        self.sku = sku
+        self.name = name
+        self.description = description
+        self.price_cents = price_cents
+        self.shipping_weight = shipping_weight
+        self.quantity = quantity
+
diff --git a/bitcoinstore/inventory/inventory_dao.py b/bitcoinstore/inventory/inventory_dao.py
new file mode 100644
index 0000000..cc18a7c
--- /dev/null
+++ b/bitcoinstore/inventory/inventory_dao.py
@@ -0,0 +1,150 @@
+from sqlalchemy import create_engine, MetaData, Table, Column, Integer, String, Boolean, text
+
+from bitcoinstore.inventory.fungible_item import FungibleItem
+from bitcoinstore.inventory.non_fungible_item import NonFungibleItem
+
+engine = create_engine("sqlite+pysqlite:///:memory:", echo=True, future=True)
+meta = MetaData()
+
+fungible_inventory = Table(
+    'fungible_inventory', meta,
+    Column('sku', String, primary_key=True),
+    Column('name', String),
+    Column('description', String),
+    Column('price', Integer),
+    Column('shipping_weight', Integer),
+    Column('quantity', Integer)
+)
+
+non_fungible_inventory = Table(
+    'non_fungible_inventory', meta,
+    Column('sku', String, primary_key=True),
+    Column('serial', String, primary_key=True),
+    Column('name', String),
+    Column('description', String),
+    Column('unique_description', String),
+    Column('price', Integer),
+    Column('shipping_weight', Integer),
+    Column('is_available', Boolean)
+)
+
+"""
+*
+*
+*
+For the purpose of testing, below will create the tables, and insert some static rows.
+*
+*
+*
+"""
+
+meta.create_all(engine)
+
+with engine.begin() as conn:
+    conn.execute(
+        fungible_inventory.insert(), [
+            {'sku': 'A', 'name': 'name of A', 'description': 'Description of A',
+             'price': 300, 'shipping_weight': '142', 'quantity': 5},
+            {'sku': 'B', 'name': 'name of B', 'description': 'Description of B',
+             'price': 400, 'shipping_weight': '152', 'quantity': 8},
+            {'sku': 'C', 'name': 'name of C', 'description': 'Description of C',
+             'price': 100, 'shipping_weight': '12', 'quantity': 0}
+        ]
+    )
+    conn.execute(
+        non_fungible_inventory.insert(), [
+            {'sku': 'D', 'serial': 'D1', 'name': 'name of D', 'description': 'Description of D',
+             'unique_description': 'D1 of D', 'price': 300, 'shipping_weight': '142', 'is_available': True},
+            {'sku': 'E', 'serial': 'E1', 'name': 'name of E', 'description': 'Description of E',
+             'unique_description': 'E1 of E', 'price': 330, 'shipping_weight': '13', 'is_available': False}
+        ]
+    )
+
+
+class FungibleInventoryDao:
+    """
+    DAO for the table fungible_inventory
+    """
+
+    def __init__(self):
+        self._conn = engine.connect()
+
+    def list_items(self):
+        ex = fungible_inventory.select()
+        rows = self._conn.execute(ex)
+        items = []
+        for row in rows:
+            sku, name, description, price, shipping_weight, quantity = row
+            item = FungibleItem(sku, name, description, price, shipping_weight, quantity)
+            items.append(item)
+        return items
+
+    def get_item(self, sku):
+        t = text("SELECT * FROM non_fungible_inventory WHERE SKU = :sku")
+        rows = self._conn.execute(t, {"sku": sku}).fetchall()
+        assert (len(rows) < 2), "Multiple items for given SKU!"
+        if len(rows) == 0:
+            return None
+        sku, name, description, price, shipping_weight, quantity = rows[0]
+        return FungibleItem(sku, name, description, price, shipping_weight, quantity)
+
+    def update_item_count(self, sku, count):
+        t = text("UPDATE fungible_inventory SET quantity = :count WHERE SKU = :sku")
+        self._conn.execute(t, count=count, sku=sku)
+
+    def create_item(self, fungible_item):
+        t = text("INSERT INTO fungible_inventory (sku, name, description, price, shipping_weight, quantity) "
+                 "VALUES (:sku, :name, :desc, :price, shipping_wt, :qty)")
+        self._conn.execute(t, sku=fungible_item.sku, name=fungible_item.name, desc=fungible_item.description,
+                           price=fungible_item.price, shipping_wt=fungible_item.shipping_weight,
+                           qty=fungible_item.quantity)
+
+    def delete_item(self, sku):
+        t = text("DELETE FROM fungible_inventory WHERE SKU = :sku")
+        self._conn.execute(t, sku=sku)
+
+
+class NonFungibleInventoryDao:
+    """
+    DAO for the table non_fungible_inventory
+    """
+
+    def __init__(self):
+        self._conn = engine.connect()
+
+    def list_items(self):
+        query = non_fungible_inventory.select()
+        rows = self._conn.execute(query)
+        items = []
+        for row in rows:
+            sku, serial, name, description, unique_description, price, shipping_weight, is_available = row
+            item = NonFungibleItem(sku, serial, name, description, unique_description, price, shipping_weight,
+                                   is_available)
+            items.append(item)
+        return items
+
+    def get_item(self, sku, serial):
+        t = text("select * from non_fungible_inventory where SKU = :sku and serial = :serial")
+        rows = self._conn.execute(t, sku=sku, serial=serial).fetchall()
+        assert (len(rows) < 2), "Multiple items for given SKU and Serial number!"
+        if len(rows) == 0:
+            return None
+        sku, serial, name, description, unique_description, price, shipping_weight, is_available = rows[0]
+        return FungibleItem(sku, serial, name, description, unique_description, price, shipping_weight, is_available)
+
+    def update_item_availability(self, sku, serial, is_available):
+        t = text("update non_fungible_inventory set is_available = :availability where SKU = :sku and serial = :serial")
+        self._conn.execute(t, availability=is_available, sku=sku, serial=serial)
+
+    def create_item(self, non_fungible_item):
+        t = text("INSERT INTO non_fungible_inventory (sku, serial, name, description, unique_description, price, "
+                 "shipping_weight, quantity) VALUES (:sku, :serial, :name, :desc, :unique_desc, :price, shipping_wt, "
+                 ":qty)")
+        self._conn.execute(t, sku=non_fungible_item.sku, serial=non_fungible_item.serial_number,
+                           name=non_fungible_item.name, desc=non_fungible_item.description,
+                           unique_desc=non_fungible_item.unique_description, price=non_fungible_item.price,
+                           shipping_wt=non_fungible_item.shipping_weight, qty=non_fungible_item.quantity)
+
+    def delete_item(self, sku, serial):
+        t = text("DELETE FROM non_fungible_inventory WHERE SKU = :sku and serial = :serial")
+        self._conn.execute(t, sku=sku, serial=serial)
diff --git a/bitcoinstore/inventory/inventory_service.py b/bitcoinstore/inventory/inventory_service.py
new file mode 100644
index 0000000..28e3b50
--- /dev/null
+++ b/bitcoinstore/inventory/inventory_service.py
@@ -0,0 +1,161 @@
+from bitcoinstore.inventory.inventory_dao import FungibleInventoryDao, NonFungibleInventoryDao
+from threading import Lock
+from bitcoinstore.inventory.exceptions import *
+
+
+class InventoryService:
+    """
+    Implementation for the Inventory Service.
+    This is to be called by the main browser frontend, Cart Service, Reservation Timeout Serivce, and backend inventory
+    management service.
+
+    Note that this service is NOT aware of how the reservation system works. Whenever an item is added to a cart, that
+    essentially removes an inventory item from this service. And when item is removed from cart, manually or via a
+    timeout system, the item is added back to the inventory via this service. The difference between reserved items, vs
+    fulfilled items is maintained by the Reservation Service, outside of Inventory Service.
+
+    Note that Inventory Service is not directly handling client requests, so it doesn't handle authorization for the
+    user context. It is assumed higher level services will do those checks.
+
+    This class is thread safe.
+    """
+
+    # (TODO): The locks below are not granular currently. Ideally replace them by named resource locks, which can
+    # lock on a unique key like SKU or serial. This way, a thread will only lock the DB rows that it needs to touch.
+    _fungible_lock = Lock()
+    _non__fungible_lock = Lock()
+
+    def __init__(self):
+        self._fungible_dao = FungibleInventoryDao()
+        self._non_fungible_dao = NonFungibleInventoryDao()
+
+    def list_fungible_items(self):
+        """
+        Returns list of all fungible items.
+        Doesn't require acquiring a lock.
+        """
+        return self._fungible_dao.list_items()
+
+    def get_fungible_item(self, sku):
+        """
+        Returns a particular fungible item identified by the sku nmme.
+        Doesn't require acquiring a lock.
+        """
+        return self._fungible_dao.get_item(sku)
+
+    def remove_fungible_item(self, sku, count):
+        """
+        Removes few items from a particular fungible item identified by the sku nmme.
+        Returns errors if item doesn't exist or short of inventory.
+
+        Note that if removal of items reduced invetory size to 0, this DOES NOT delete the item from inventory.
+
+        It requires acquiring a lock, since we are adjusting inventory quantity over 2 different db calls.
+        """
+
+        self._fungible_lock.acquire()
+        item = self.get_fungible_item(sku)
+        if item is None:
+            self._fungible_lock.release()
+            raise ItemNotFoundException()
+        if item.quantity < count:
+            self._fungible_lock.release()
+            raise InsufficientInventoryException()
+        new_count = item.quantity - count
+        self._fungible_dao.update_item_count(sku, new_count)
+        self._fungible_lock.release()
+
+    def add_fungible_item(self, sku, count):
+        """
+        Adds a few items(count) to a particular fungible item identified by the sku nmme.
+        Returns errors if the inventory item doesn't exist.
+
+        It requires acquiring a lock, since we are adjusting inventory quantity over 2 different db calls.
+        """
+        self._fungible_lock.acquire()
+        item = self.get_fungible_item(sku)
+        if item is None:
+            self._fungible_lock.release()
+            raise ItemNotFoundException()
+        new_count = item.quantity + count
+        self._fungible_dao.update_item_count(sku, new_count)
+        self._fungible_lock.release()
+
+    def create_new_fungible_item(self, fungible_item):
+        """
+        Creates a new fungible item.
+        Returns error if the inventory item already exist.
+
+        It requires acquiring a lock, since we want only the winning thread in a race condition to return success. The
+        losing thread in the race condition will get an error, indicating its version failed to apply.
+        """
+        self._fungible_lock.acquire()
+        item = self.get_fungible_item(fungible_item.sku)
+        if item is not None:
+            self._fungible_lock.release()
+            raise AlreadyExistingInventoryException()
+        self._fungible_dao.create_item(fungible_item)
+        self._fungible_lock.release()
+
+    def delete_fungible_item(self, sku):
+        """
+        Deletes a fungible item, identified by the sku.
+        Throws error if item didn't exist.
+
+        Doesn't require a lock.
+        """
+        item = self.get_fungible_item(sku)
+        if item is None:
+            raise ItemNotFoundException()
+        self._fungible_dao.delete_item(sku)
+
+    """
+    All methods below are for non-fungible inventory, and implemented similarly to the fungible inventory, except for
+    minor details on the quantity vs is_available columns.
+    The documentation for below methods should be almost same as for above methods for fungible inventory.
+    """
+
+    def list_non_fungible_items(self):
+        return self._non_fungible_dao.list_items()
+
+    def get_non_fungible_item(self, sku, serial):
+        return self._non_fungible_dao.get_item(sku, serial)
+
+    def remove_non_fungible_item(self, sku, serial):
+        self._non_fungible_lock.acquire()
+        item = self.get_non_fungible_item(sku, serial)
+        if item is None:
+            self._fungible_lock.release()
+            raise ItemNotFoundException()
+        if not item.is_available:
+            self._fungible_lock.release()
+            raise InsufficientInventoryException()
+        self._non_fungible_dao.update_item_availability(sku, serial, False)
+        self._non_fungible_lock.release()
+
+    def add_non_fungible_item(self, sku, serial):
+        self._non_fungible_lock.acquire()
+        item = self.get_non_fungible_item(sku, serial)
+        if item is None:
+            self._fungible_lock.release()
+            raise ItemNotFoundException()
+        if item.is_available:
+            self._fungible_lock.release()
+            raise AlreadyExistingInventoryException()
+        self._non_fungible_dao.update_item_availability(sku, serial, True)
+        self._non_fungible_lock.release()
+
+    def create_new_non_fungible_item(self, non_fungible_item):
+        self._non_fungible_lock.acquire()
+        item = self.get_non_fungible_item(non_fungible_item.sku, non_fungible_item.serial)
+        if item is not None:
+            self._fungible_lock.release()
+            raise AlreadyExistingInventoryException()
+        self._non_fungible_dao.create_item(non_fungible_item)
+        self._non_fungible_lock.release()
+
+    def delete_non_fungible_item(self, sku, serial):
+        item = self.get_non_fungible_item(sku, serial)
+        if item is None:
+            raise ItemNotFoundException()
+        self._non_fungible_dao.delete_item(sku, serial)
diff --git a/bitcoinstore/inventory/non_fungible_item.py b/bitcoinstore/inventory/non_fungible_item.py
new file mode 100644
index 0000000..9aa9493
--- /dev/null
+++ b/bitcoinstore/inventory/non_fungible_item.py
@@ -0,0 +1,17 @@
+
+class NonFungibleItem:
+    """
+    A class object to hold contents of a row of non_fungible_inventory database.
+    This is the object returned from the DAO, and to clients of the InventoryService.
+    """
+
+    def __init__(self, sku = '', serial_number = '', name = '', description = '', unique_description = '',
+                 price_cents = 0, shipping_weight = 0, is_available = False):
+        self.sku = sku
+        self.serial_number = serial_number
+        self.name = name
+        self.description = description
+        self.unique_description = unique_description
+        self.price_cents = price_cents
+        self.shipping_weight = shipping_weight
+        self.is_available = is_available
diff --git a/test/bitcoinstore/inventory/test_functional.py b/test/bitcoinstore/inventory/test_functional.py
new file mode 100644
index 0000000..b319ca9
--- /dev/null
+++ b/test/bitcoinstore/inventory/test_functional.py
@@ -0,0 +1,26 @@
+
+import pytest
+
+from bitcoinstore.inventory.exceptions import ItemNotFoundException, InsufficientInventoryException, \
+    AlreadyExistingInventoryException
+from bitcoinstore.inventory.fungible_item import FungibleItem
+from bitcoinstore.inventory.inventory_dao import FungibleInventoryDao
+from bitcoinstore.inventory.inventory_service import InventoryService
+
+class TestFunctionalInventoryService():
+
+    @pytest.fixture(autouse=True)
+    def setup(self):
+        self.service = InventoryService()
+
+    def test_list_fungible_items(self):
+        items = self.service.list_fungible_items()
+        assert len(items) == 3
+        for item in items:
+            assert item.sku is not None
+
+    def test_get_fungible_item(self):
+        sku = 'A'
+        item = self.service.get_fungible_item(sku)
+
+        # (TODO) Finish the test, and other functional tests.
diff --git a/test/bitcoinstore/inventory/test_inventory_dao.py b/test/bitcoinstore/inventory/test_inventory_dao.py
new file mode 100644
index 0000000..1c660ad
--- /dev/null
+++ b/test/bitcoinstore/inventory/test_inventory_dao.py
@@ -0,0 +1,17 @@
+from unittest import mock
+from unittest.mock import MagicMock
+
+import pytest
+
+from bitcoinstore.inventory.exceptions import ItemNotFoundException, InsufficientInventoryException, \
+    AlreadyExistingInventoryException
+from bitcoinstore.inventory.fungible_item import FungibleItem
+from bitcoinstore.inventory.inventory_dao import FungibleInventoryDao
+from bitcoinstore.inventory.inventory_service import InventoryService
+
+
+class TestInventoryService():
+    """
+    (TODO): Write unit-tests
+    """
+    pass
diff --git a/test/bitcoinstore/inventory/test_inventory_service.py b/test/bitcoinstore/inventory/test_inventory_service.py
new file mode 100644
index 0000000..1a72302
--- /dev/null
+++ b/test/bitcoinstore/inventory/test_inventory_service.py
@@ -0,0 +1,95 @@
+from unittest import mock
+from unittest.mock import MagicMock
+
+import pytest
+
+from bitcoinstore.inventory.exceptions import ItemNotFoundException, InsufficientInventoryException, \
+    AlreadyExistingInventoryException
+from bitcoinstore.inventory.fungible_item import FungibleItem
+from bitcoinstore.inventory.inventory_dao import FungibleInventoryDao
+from bitcoinstore.inventory.inventory_service import InventoryService
+
+
+class TestInventoryService():
+
+    @pytest.fixture(autouse=True)
+    def setup(self):
+        self.service = InventoryService()
+
+    @mock.patch.object(FungibleInventoryDao, 'list_items')
+    def test_list_fungible_items(self, mock_list_items):
+        self.service.list_fungible_items()
+
+        mock_list_items.assert_called_once()
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item')
+    def test_get_fungible_item(self, mock_get_item):
+        sku = "Test Sku"
+
+        self.service.get_fungible_item(sku)
+
+        mock_get_item.assert_called_once_with(sku)
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item', return_value=None)
+    @mock.patch.object(FungibleInventoryDao, 'update_item_count')
+    def test_remove_fungible_item_non_existent_item(self, mock_update_item_count, mock_get_item):
+        sku = "Test Sku"
+
+        try:
+            self.service.remove_fungible_item(sku, 5)
+        except ItemNotFoundException:
+            pass
+
+        mock_get_item.assert_called_once_with(sku)
+        mock_update_item_count.assert_not_called()
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item', return_value=FungibleItem(quantity = 3))
+    @mock.patch.object(FungibleInventoryDao, 'update_item_count')
+    def test_remove_fungible_item_insufficient_inventory(self, mock_update_item_count, mock_get_item):
+        sku = "Test Sku"
+
+        try:
+            self.service.remove_fungible_item(sku, 5)
+        except InsufficientInventoryException:
+            pass
+
+        mock_get_item.assert_called_once_with(sku)
+        mock_update_item_count.assert_not_called()
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item', return_value=FungibleItem(quantity = 3))
+    @mock.patch.object(FungibleInventoryDao, 'update_item_count')
+    def test_remove_fungible_item_success(self, mock_update_item_count, mock_get_item):
+        sku = "Test Sku"
+
+        self.service.remove_fungible_item(sku, 3)
+
+        mock_get_item.assert_called_once_with(sku)
+        mock_update_item_count.assert_called_once_with(sku, 0)
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item', return_value=FungibleItem(sku='A'))
+    @mock.patch.object(FungibleInventoryDao, 'create_item')
+    def test_create_new_fungible_item_failure(self, mock_create_item, mock_get_item):
+        sku = "A"
+
+        try:
+            self.service.create_new_fungible_item(FungibleItem(sku=sku))
+        except AlreadyExistingInventoryException:
+            pass
+
+        mock_get_item.assert_called_once_with(sku)
+        mock_create_item.assert_not_called()
+
+    @mock.patch.object(FungibleInventoryDao, 'get_item', return_value=None)
+    @mock.patch.object(FungibleInventoryDao, 'create_item')
+    def test_create_new_fungible_item_success(self, mock_create_item, mock_get_item):
+        sku = 'A'
+        item = FungibleItem(sku=sku)
+
+        self.service.create_new_fungible_item(item)
+
+        mock_get_item.assert_called_once_with(sku)
+        mock_create_item.assert_called_once_with(item)
+
+"""
+(TODO): Finish all tests for non fungible items too
+"""