Amazon’s FBA commingled inventory option, also known as Stickerless Commingled Inventory, allows sellers to pool their products with identical items from other sellers in Amazon’s fulfillment centers. This option streamlines fulfillment but requires understanding its implications to maximize benefits and mitigate risks.
What Is Amazon’s FBA Commingled Inventory?
With the commingled inventory option:
- Sellers do not label their products with specific Amazon barcodes (FNSKU).
- Products are identified only by their manufacturer’s UPC, EAN, or ISBN barcode.
- When an order is placed, Amazon ships the product closest to the customer from its network, regardless of which seller provided it.
Benefits
- Faster Fulfillment:
- Orders are fulfilled more quickly because products are shipped from the nearest warehouse.
- Reduced Labeling Costs:
- Sellers avoid printing and applying FNSKU labels.
- Simplified Process:
- No need to segregate inventory based on FNSKUs.
Drawbacks
- Risk of Quality Issues:
- Mixed inventory pools can result in a seller’s customer receiving a substandard product from another seller.
- Limited Control:
- You lose traceability over which specific items are sent to customers.
How to Enable Commingled Inventory
1. Verify Product Eligibility
Not all products are eligible for commingled inventory. Ensure your product:
- Has a scannable manufacturer barcode.
- Meets Amazon’s labeling requirements.
- Does not fall under restricted or high-risk categories, like certain electronics or perishables.
2. Activate the Option
- Log in to Seller Central.
- Navigate to Settings > Fulfillment by Amazon.
- Under the Barcode Preference section, select Use Manufacturer Barcode for eligible products.
3. Send Inventory Without FNSKU Labels
Prepare and ship your inventory using only the manufacturer barcode. Ensure products are properly packaged and meet Amazon’s FBA requirements.
Advantages of Using Commingled Inventory
1. Lower Fulfillment Costs
- Reduces the time and labor associated with printing and applying FNSKU labels.
2. Faster Delivery
- Amazon uses the nearest available inventory, minimizing shipping time.
3. Scalability
- Ideal for high-volume sellers handling a large catalog of products.
Risks of Commingled Inventory and How to Mitigate Them
1. Risk: Counterfeit Products
Since commingled inventory combines items from multiple sellers, counterfeit or substandard items could enter the pool.
Mitigation Strategies
- Source inventory directly from trusted manufacturers or authorized distributors.
- Monitor customer complaints and feedback for potential quality issues.
- Periodically purchase your own product to verify quality.
2. Risk: Accountability for Other Sellers’ Products
If a customer receives a defective or counterfeit product, you may face negative reviews or account penalties, even if the product didn’t originate from your stock.
Mitigation Strategies
- Use Amazon’s Transparency Program to verify product authenticity.
- Regularly audit your account for performance issues.
3. Risk: Loss of Brand Control
Your products may be interchanged with others, diluting your brand reputation.
Mitigation Strategies
- Opt for FNSKU labeling for products where brand differentiation is critical.
- Use custom packaging or unique identifiers, where possible.
How to Transition from Commingled to Stickered Inventory
If commingled inventory isn’t meeting your expectations, you can switch to stickered inventory:
1. Change Barcode Preference
- Go to Seller Central > Fulfillment by Amazon > Barcode Preference.
- Select Amazon Barcode (FNSKU).
2. Label Future Shipments
- Use Amazon’s FBA Label Service or print and apply FNSKU labels manually before shipping.
3. Manage Existing Inventory
- Create a removal order for commingled stock and relabel it with FNSKUs before re-sending.
When to Use Commingled Inventory
Commingled inventory is a good fit for:
- Commoditized Products: Items identical across sellers, like books or electronics.
- Small Sellers: Those looking to reduce labeling costs and streamline operations.
- Fast-Moving Products: High-turnover inventory where delivery speed is critical.
However, stickered inventory is better for:
- Private Label Products: To maintain brand control and avoid counterfeit issues.
- Unique or Customizable Items: Where differentiation is important.
Monitoring Commingled Inventory Performance
1. Use Inventory Reports
Track inventory movement and return rates in Seller Central > Reports > Fulfillment Reports.
2. Monitor Customer Feedback
Watch for reviews or complaints indicating quality issues or counterfeit products.
3. Track Refunds and Returns
Analyze return reasons to detect patterns related to commingled inventory.
Conclusion
Amazon’s FBA commingled inventory option can save time and costs while improving delivery speeds. However, it’s not without risks, especially related to quality control and brand reputation. By understanding how commingled inventory works, assessing its suitability for your products, and implementing strategies to mitigate risks, you can decide whether this option aligns with your business goals.