The world of Amazon can be a confusing place – sometimes feeling like an alien planet with a language all its own. One of those unfamiliar terms you may have heard a lot about lately is “Amazon commingled inventory.” This Amazon practice deals with the process of stickerless inventory stocked through the Fulfillment By Amazon (FBA) program.
Still a bit unsure what we’re talking about? You’re not alone. Throughout this blog, we will help define Amazon commingled inventory, explain how it may impact your Amazon business, discuss the pros and cons of stickerless commingling and ultimately help you decide if it is right for you.
What is Amazon Commingled Inventory?
Let’s start with the basics. Amazon offers two separate ways for sellers to send products to FBA:
- Stickered Inventory – FBA inventory which Amazon has labeled with an Amazon barcode as belonging to a certain seller. A sticker is applied over the product barcode to be scanned when storing, picking and packing.
- Stickerless or Commingled Inventory – FBA inventory that has not been labeled, and therefore is not tied to a specific seller. This inventory is only identifiable through the manufacturer’s UPC barcode and is commingled with the same barcoded items offered by other sellers.
Essentially, the difference comes down to whether or not you want your inventory to be grouped with that of other sellers, or if you want your product inventory to be kept separate.
What Happens to My Amazon Commingled Inventory?
By agreeing to stickerless inventory, you are simply allowing your products to be mixed in with the inventory of other sellers. Contrary to what you might think, you are not giving up ownership of your product or the ability to track and manage your inventory. Amazon will still track how much of your inventory is sold, and you’ll be properly compensated for each of those sales. On top of that, your inventory will still continue to be stored in its own spot in Amazon’s fulfillment center.
So, Then How Does Commingling Inventory Affect Me?
Amazon benefits from commingling because it allows the company to get orders to its customers more quickly. Say your inventory is in a fulfillment center in New Jersey but is purchased by a customer in California. Amazon is likely to pick a product from another seller with commingled inventory in California because they can ship that product to the customer more efficiently. Because you made the sale, you’ll still get the money from the order and your inventory will be docked. The same is true for the seller who makes a sale in New Jersey. Your product will likely be picked to fulfill that order.
What are the Benefits of Commingling?
- Benefits for Amazon – Amazon Commingled inventory allows Amazon to fulfill orders from the FBA warehouse closest to the buyer. This gives Amazon more freedom to streamline and simplify its fulfillment process. With dozens of FBA centers and millions of orders to fulfill a day, this is a big win for Amazon.
- Benefits for the Buyer – As we touched on above, commingling offers a better overall customer experience since it helps buyers receive their orders in a more timely fashion.
3. Benefits for You – To start, a better customer experience could mean better reviews and more repeat purchases for you. But customer satisfaction isn’t the only benefit of commingled inventory. Stickerless inventory makes it easier and quicker to set up your FBA shipment since it allows you to skip the labeling step. In some cases, you may be able to have your stickerless shipments sent straight from the manufacturer or wholesaler to the FBA warehouse – skipping seller involvement altogether.
What are the Drawbacks of Commingling?
The biggest issue sellers encounter with commingled inventory is counterfeit merchandise. When you enable stickerless commingled inventory, you are essentially agreeing that your products can be freely interchanged with other products with the same manufacturer’s barcode. This is a faith-based system in which you are trusting that the sellers you commingle with are offering products of the same quality as you are.
Sellers offering knockoff, imitation products are stingy by nature, meaning they are more likely to enable stickerless commingling when selling via FBA. If a counterfeit product is shipping to fulfill one of your orders, you could end up with negative reviews and A-to-Z claims for selling fraudulent items. If you choose to enable stickerless commingled inventory, always be prepared to show proof of purchase and any other documents you have proving the validity and authenticity of your products.
When Counterfeits Commingle Everybody Loses
- The Customer Loses – Counterfeit products are almost always inferior to the real thing, meaning the buyer receives a product that is of lower quality than what was advertised.
- Amazon Loses – Dissatisfied customers mean diminished trust in the Amazon marketplace. Plus, in these circumstances, Amazon has very little power to identify the counterfeit seller since stickerless commingled inventory isn’t tied to a specific seller.
- Honest Sellers Lose – Sellers offering authentic goods have the most at stake here because they run the risk of encountering customer complaints, account violations and other penalties for counterfeit items they had no responsibility for. These sellers even run the risk of having their accounts shut down. This can result in hefty fees to reclaim items stocked in fulfillment centers, and even withheld payments from Amazon.
Know Who You’re Dealing With Before You Commingle
Right now you might be asking yourself, “With so much at stake how can I be confident that my competitors are offering the same high-quality products as I am?” The answer: do your research. The best way to be confident in the integrity of the sellers you may be commingling with is to assess their listings. What kind of product reviews do they have? What is their seller rating?
Of course, there is no guarantee that other FBA sellers offering the same product as you are commingling their inventory. But if you are confident in the reputation of your competitors and the quality of their products, there’s a good chance you can enable stickerless commingled inventory with confidence, as well.
A Note for Private Label Sellers
Probably the biggest thing to consider when assessing the pros and cons of commingling your inventory is whether or not you are a private label seller. For most private label sellers, we recommend that you keep your inventory separate with an Amazon barcode (Amazon FNSKU).
If you are truly private label, you should be the only brand offering your product. If there are other sellers offering the same product, you can be pretty confident that it’s a knockoff. Keeping your inventory separate from theirs is the best way to protect your brand and the integrity of your product.
Be Sure Before You Act
When you make the decision to enable or disable stickerless commingled inventory, you are doing so at the account level. This means that once you set your preference, your choice is locked for that product. The only way to go back and alter your selection is to delete your listing, change your inventory setting and then build a brand new listing. To avoid that tedious, time-consuming process, make sure you know exactly what approach you want to take before you make your selection.
Alternatives to Stickerless Amazon Commingled Inventory
If you decide that commingling isn’t quite the right FBA choice for your business, you have a few other options. The seemingly obvious choice: you can label your products yourself. If you choose this route, make sure you never have both a UPC barcode and Amazon FNSKU barcode visible at the same time. The Amazon FNSKU code should always fully cover the UPC code to help avoid confusion on Amazon’s end.
Many sellers hope to avoid self-labeling because of the additional time and resources it takes to create and apply labels. The good news is, if you sell case-packed products, you can cut down on some of this hassle by labeling the case instead of each individual product. As long as you are using the case as shipped by the manufacturer, and not creating your own makeshift case, you’ll be good to go.
If case labeling is not an option for you, you may want to consider Amazon’s FBA Label Service. You just send your inventory to Amazon and they will scan and label each individual unit on your behalf. Do note that the service is only eligible for products with scannable barcodes and charges a fee on a per-unit basis.
Talk with a Professional Consultant
Like many Amazon business decisions, there is clearly a lot to consider when weighing the pros and cons of stickerless commingled inventory. Luckily, you are not left to your own devices when making this important choice. Talking with an Amazon consultant can be a great way to carefully sift through your options, address any questions or concerns you may have or confirm the decision you are already leaning toward. Our team at Awesome Dynamic is ready to help in any way we can!