Amazon Commingled Inventory and Its Downside

by Tomer

April 11, 2022

Amazon commingled inventory can help sellers save a lot of time from labeling every product for shipment. While it may sound like a great idea, Amazon sellers have mixed feedback about it. 

In this article, I will discuss what Amazon commingled inventory is, how it works, which products are qualified, its pros and cons, and how to turn it off on seller central.

Read the full article to find out how to avoid counterfeit issues on commingled inventory. 

What is Amazon Commingled Inventory?

Amazon commingled inventory

Amazon uses the term “commingled inventory” to describe products that are housed in their fulfillment centers but do not have a unique Merchant ID assigned to them. These are products that Amazon groups together based on their JAN, EAN, UPC, or ISBN barcodes rather than Amazon barcodes or FN-SKUs. 

While most items sent to one of Amazon’s warehouses come with their own label identification associated with the seller, all sellers have the option of merging their products with those of other merchants selling the same products. This means that sellers can choose not to use the FN-SKU stickers, which allows them to streamline their inventory preparation.

Amazon uses three kinds of barcodes to identify products, these are:

  • Manufacturer barcodes: These barcodes may include JAN, UPC, EAN, and ISBN. Amazon uses the manufacturer barcode to track eligible items across the fulfillment process except when you modify your barcode setting. 

If your product does not meet the eligibility requirements for virtual tracking, you may request an exception to utilize the manufacturer barcode by registering your ASIN with Amazon Brand Registry. For ineligible products, non-brand-registered sellers would be obliged to use Amazon barcodes.

  • Amazon barcodes: All products that do not have a manufacturer barcode must have Amazon barcodes, such as FN-SKU, attached to them. Examples of these products are those that don’t have a scannable JAN, EAN, UPC, or ISBN barcode, topical and consumable products, those that are not in new condition, dangerous goods, and restricted products, etc. 

You can either print and apply Amazon barcodes to your products yourself or pay Amazon a per-item fee to print and apply them for you.

  • Transparency Authenticity Code: Transparency codes are item-level authentication stickers that aid in the protection of brand owners and customers against counterfeiting. Transparency codes come with a Transparency “T” emblem and must not be covered or obscured by any other label.

Notes:

  • You can apply for a GS1 standard UPC barcode if you are a producer or brand owner who wants to print barcodes directly on product packaging.
  • Manufacturer barcodes or Amazon barcodes can be used to track products that require additional packaging, such as bagging or bubble wrap. Prepped items, on the other hand, will need to be labeled.
  • Except for products in dangerous goods, expiration-dated products, and Toys & Games and Baby Products categories, all products enrolled in the Transparency program are available for virtual tracking. Amazon reserves the right to amend the categories that are eligible for Transparency.

Source

Commingling is not suitable for all kinds of sellers, especially for those who are selling Private Label (PL), because they don’t share their listings with other sellers. However, it is beneficial for Wholesale and Retail Arbitrage/Online Arbitrage Amazon business models.

How Does Commingled Inventory Work?

Here’s a step-by-step guide to better understand how Amazon commingled inventory works.

  1. Check Product Eligibility Requirements

You first need to check the product’s eligibility requirements since not all products are eligible for commingling. If your item is eligible, you have the option to create a unique Amazon barcode or use a manufacturer barcode when preparing a shipping plan. 

  1. Create a New Product Offer for an Existing Listing

Create a new product offer that tracks inventory using UPC, EAN, or ISBN barcodes. Normally, an existing listing on Amazon is for business models that leverage the commingled inventory service, and sellers just need to establish a new offering for an existing listing. 

  1. Switch from Amazon to Manufacturer Barcode

Alternatively, if you already have an FBA product listing and wish to enable commingling, simply switch from Amazon to manufacturer barcodes. 

However, to use the manufacturer barcode option, products with current inventory in a fulfillment center and are tracked using an Amazon barcode must have a new listing created with a new SKU. 

Before the listing’s barcode choice can be changed from Amazon to manufacturer barcodes, any available inventory must be sold through or removed by issuing a removal order. 

You can skip the labeling step and send your inventory to FBA right away after completing steps #2 or #3.

  1. Virtual Tracking Becomes Available

When Amazon gets your stickerless items, virtual tracking becomes available. Let’s say a customer orders anything from your Amazon store. In that instance, Amazon will credit you for the sale, but it does not mean that the unit you turned in will be picked up and delivered. 

To expedite delivery, Amazon will most likely choose the commingled unit that is held in the FC nearest to the buyer.

How to Qualify for Amazon Commingled Inventory?

Not all products qualify for Amazon commingled inventory. If you are interested in commingling, you first need to know if your product qualifies.

Product eligibility requirements

Here are the requirements for your product to qualify for Amazon commingled inventory.

  • It must be in new condition
  • Not consumable, perishable, or topical items, such as skin creams, grocery items, soaps, or cosmetics
  • It should not be baby clothes or toys, or anything related to children or infants
  • It must be a product that does not have an expiration date
  • It should not be included in FBA dangerous good category or restricted product
  • It must not be a media product such as VHS tapes, CDs, or DVDs
  • It must feature a single and readable EAN, ISBN, or UPC barcode that matches a single Amazon Standard Identification Number (ASIN)

What if the Product is Not Qualified

In case your product does not meet the requirements to qualify for commingling, you would need a unique Amazon barcode as a replacement for EAN, UPC, or ISBN labels. 

How to Switch from Manufacturer Barcode to Amazon Barcode

To do this, here’s a step-by-step guide on how to switch from manufacturer barcode to Amazon barcode for ineligible products.

  1. Generate a new product offer for every ASIN you wish to use for commingling, then choose Amazon barcode for the barcode preference. 
  • On the Manage FBA Inventory page, look for the ASIN you want to commingle with similar products from other Amazon sellers.
  • On the right side of the ASIN, click Edit and then choose “add another condition”.
  • Go to the Offer creation page, enter the New Seller SKU, answer the required fields, and then Save. You can choose the same item condition as your current offer. 
  • For the Choose Barcode Type page, choose Amazon barcode, click on Save & Continue. 
  • Finalize and complete your shipping plan.

Note: For products categorized as dangerous goods, you may be required to submit all of the dangerous goods information when creating or converting a listing for FBA. To do this, go to the Convert to FBA page, fill out the Add dangerous items information box, and then click Save & Continue. 

  1. Create an Amazon barcode label and apply it to your products. 

Ineligible products with merely the manufacturer barcode provided to FCs may be charged an unanticipated service fee. The cost of generating and placing an FN-SKU sticker on each ineligible item received by FBA is covered by this fee.

Alternatively, you can seek an exception to utilize the manufacturer barcode by registering your goods with Amazon Brand Registry and submitting an application.

Pros and Cons of Amazon Commingled Inventory

Amazon commingled inventory

To find out if you should try commingling, here are its pros and cons. 

Pros

  • Commingling can help save on preparation time and warehouse labor costs because you don’t need to make and attach an FN-SKU sticker to every item.
  • Aside from warehouse labor costs, it can also help you save on shipping costs since you can send your inventory directly from the distributor or manufacturer. This means your inventory doesn’t need to stop at a preparation center.
  • Commingling can also prevent errors in FBA labeling since you’re going stickerless. Incorrect packaging labels can hurt your business as they can cause FBA check-in delays or, worst, FC refusal. When customers receive the wrong product, it can also increase customer returns and a possible listing suspension.
  • Another benefit of commingling is that customers can receive orders faster since items are interchangeable. This means that Amazon will pick the units that are stored in the warehouse closest to the customer. 

It doesn’t necessarily have to be your product. When customers get their orders faster, it can help increase your buyer’s satisfaction and get great reviews as well.

Cons

While commingling inventory has its perks, it also has some drawbacks. Here are some of the common downsides of Amazon commingling inventory.

  • While you make sure that all your products are high-quality and authentic, not all sellers may do the same. One disadvantage of commingling is mixing your authentic and high-quality items with other sellers’ counterfeit or defective units. 
  • If some sellers send in knock-off versions of your commingled items and one of your buyers receives it, there’s a chance you will get a negative review. It can damage your seller account health and your reputation when this happens. If your account health is unsatisfactory, it may lead to listing or account suspension or removal.
  • Another disadvantage of commingling is that you lose control over your inventory since commingled inventory is a collection of identical items from many merchants. Amazon normally ships it from a fulfillment center closer to the customer when a customer orders a product, regardless of who the vendor is. 

They may choose your unit or one from another seller, implying that you do not have complete control over the legitimacy or quality of the product given to your clients.

  • Customers are more likely to return sub-par or damaged goods or request refunds, not to mention negative product reviews that might hurt your sales.
  • You can be held responsible for the customer’s counterfeit unit. It would be difficult to verify if the product was truly yours or not if a customer filed a counterfeit complaint against you because there is no unique Amazon barcode that you can use to trace it back to you.

How Do I Turn Off Commingled Inventory on Amazon?

Here’s a step-by-step guide on how to turn off commingled inventory on Amazon.

  • Go to Seller Central, choose Settings, and click on Fulfillment by Amazon. 
  • Scroll down and search for FBA Product Barcode Preference and click on Edit.
  • Choose Amazon barcode and click Update

If your Seller Central is set to Manufacturer barcode at the time you add your initial item to a batch, Amazon may notify you to change the setting if needed.

By clicking Update Preference, you will be directed to the Seller Central page, where you can change your label settings as explained above. 

Note: If you want to label an item that was previously listed with the commingling setting switched on in your Seller account, you’ll need to create a new MSKU when adding it to a batch. This is because you can’t modify the label type for an MSKU after it’s been created on Amazon. Once an MSKU is marked as commingled, it will remain commingled indefinitely.

How to Avoid Counterfeit Issues on Amazon Commingled Inventory?

Amazon commingled inventory

Selecting of Products

Even though you don’t have total control over the quality or legitimacy of commingled units delivered by competitors or other sellers, Amazon does its best to mitigate such risks by ensuring that only qualified products are shipped to fulfillment centers.

Media items, cosmetics, and topical goods are among the most vulnerable to counterfeiting. Perishable, hazardous, and baby products are also restricted since they pose a greater health risk than other products.

Consider these constraints and other elements that may enhance or lessen a product’s risk of counterfeiting when deciding which products to submit for commingling. Consider whether the benefits of combining that product with similar products from other suppliers outweigh the hazards (or vice versa). 

The best way forward is to devise a well-thought-out strategy, such as selecting a commingling product that minimizes risk while maximizing efficiency and profit.

Tracking Inventory Using Amazon Barcodes

The barcode preference for your seller account is set to use the manufacturer barcode by default. You can, however, modify this at any moment.

The update will take about a day to take effect, and it will only affect new offers. You cannot change the barcode option for existing offers and shipping plans that have already been generated.

You must create a new offer or alter the barcode preference setting for each offer to use the new Amazon barcode, which will take effect on your new shipping plans.

You can update your existing product listings that are still on manufacturer barcodes by doing the following:

  • Find the Inventory tab and go to Manage Inventory
  • Find the product listing that you want to change the barcode preference
  • Click on Edit/Relist
  • Answer the required fields and ensure that the Fulfillment Channel is set to Amazon
  • Click on Save and Finish

After you’ve changed your seller account, you’ll need to produce Amazon barcodes and attach them to each product before shipping them to Amazon. If you don’t want to do it yourself or hire a prep center to do it, Amazon’s FBA Label Service will print and affix labels for you at an additional expense.

Make a cost comparison to see if using FBA Label Service is more expensive or less expensive than using an outside prep facility.

Printing the Correct FN-SKU on Packaging

Some private label sellers prefer to have their FN-SKU put directly on their product packaging rather than their UPC code to save time and money by not having to apply stickers.

You can ask your supplier to print your FN-SKU label on your product packaging. In most cases, you’ll need to alter your product packaging design before sending it to your supplier to have future product packaging printed using FN-SKU barcodes instead of your UPC code.

You can get your FN-SKU by logging in to your Seller Central and creating a shipment. Amazon will automatically generate a downloadable link. The link contains all the FN-SKU labels for all the items in your shipping plan. 

Because all the labels in the file are identical, you can put any of the barcodes on them on your packaging. Share these FN-SKU labels with your package designer so that they may add your FN-SKU barcode to your product packaging before sending it to your supplier.

Adding Special Labels

Some merchants propose adding distinctive identifiers on the box, such as a colored dot, item color, or model number, in addition to the associated EAN, UPC, or ISBN barcode, so that commingled pieces may be identified afterward. Doing this may help you identify which products are yours and it would be easier for you to prove and trace which items are yours. 

Conclusion

Amazon commingled inventory has its perks and drawbacks. As a seller, it is best to weigh whether or not commingling will work for your business. Also, make sure to follow the steps above to avoid counterfeit issues with your commingling inventory. 

Are you commingling? Please share some of your tips in the comments, and let’s learn from each other. 

About the author

My name is Tomer, and I founded Sourcing Monster to share proven tips and methods that I use every day for my Amazon business to provide value and growth for you as well as you journey through your own business!

Feel free to comment or share any feedback down below!

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