Confused about custom GameObjects,Custom GameObject confusion

Hello! I've been trying to create a custom GameObject for my project but have been hitting a roadblock. The GameObject has a script attatched to it when it's created called InventoryItem. I can create the GameObject just fine from the menu, but once I do I can't drag it into spaces in the inspector that require InventoryItem obejcts.

By this I mean, how you can drag Toggle objects created using the menu into spaces in the inspector that require a Toggle. How do I get Unity to recognize my custom GameObject of BEING an InventoryItem for use in the inspector? thanks!

Here is my code:

 [MenuItem("GameObject/Custom/Inventory Item", false, 10)]
     static void CreateInventoryItem(MenuCommand menuCommand)
     {
         //Create the object
         GameObject newItem = new GameObject("New Inventory Item");
         // Ensure it gets reparented if this was a context click
         GameObjectUtility.SetParentAndAlign(newItem, menuCommand.context as GameObject);
         // Register the creation in the undo system
         Undo.RegisterCreatedObjectUndo(newItem, "Create " + newItem.name);
         Selection.activeObject = newItem;
 
         //add components
         newItem.AddComponent<InventoryItem>();
     }

P.S. No, I can't use ScriptableObjects for this. It's what I used initially, but I've since read that if a ScriptableObject's values are changed often, it's not best to use them because you need to manually save and load each one. I am going to have a lot of InventoryItems with constantly changing values, so I opted to create a ScriptableObject for the "base stats" of an item, add it to my InventoryItem script, and then modify only the values of InventoryItem during runtime. I want them separated for a few other reasons as well, such as having different favorited InventoryItems that all use the same base stats of my ScriptableObject item.