To Commingle or Not To Commingle with Fulfillment by Amazon
- November 16, 2015 | Marcus DeHart
One of the first questions I find myself asking when I get an invitation to a party is “Who’s going to be there?” The whole point of a party is to spend time with people, and if the people at the party are not the people I want to spend time with, then maybe going isn’t such a good idea. That’s how I look at Fulfillment by Amazon’s stickerless, commingled inventory option.
The primary incentive for using stickerless, commingled inventory comes from that first word “stickerless.” Early on, Amazon recognized that labeling every individual unit with an Amazon sticker was a showstopper for some sellers. For many sellers just getting the labels to print right so that they could be scanned at the fulfillment center was a challenge.
So Amazon introduced the idea that products with UPC codes on them could be scanned for storage. The advantage is that it makes things a lot easier for sellers of standardized items. The downside is that without an Amazon label, it's impossible to tell one seller’s inventory from another's identical products.
What Is Commingling?
By agreeing to Amazon’s terms for stickerless, commingled inventory, you agree to mix your inventory with other sellers' stickerless inventory with the same UPCs.
That does not mean that Amazon puts your entire inventory into a pile with every other seller’s identical inventory. Your inventory is still stored in its own spot in the fulfillment center. What it does mean is that if your inventory is in a fulfillment center on the east coast and a shopper on the west coast buys your product on Amazon, Amazon will likely pick a product from another seller with commingled inventory on the west coast. You’ll get the money for the order and Amazon will subtract 1 from your inventory quantity. Likewise, when someone else sells the same product on the east coast, Amazon will likely grab a unit from your shelf to fulfill the order.
Most sellers would prefer not to commingle their inventory, but the work saved by going stickerless is a strong incentive for commingling. It can save you time and money. It can also grease the skids for getting your orders fulfilled quickly, which Amazon loves to do, and is one of the benefits of using FBA to begin with.
Who’s Coming to the Party?
So that brings us back to my party analogy. If I’m going to commingle my inventory with the inventory of other sellers, I want to know who’s selling the same products. Are they reputable? Do they have good product reviews? What’s their seller rating?
Of course, just because other FBA sellers are offering the same product doesn’t mean that they are all commingling their inventory. If you have a large variety of products, researching the competition for every one of your products could be time-consuming. I bet there’s someone out there who could make an app for that.
If you have your own line of products with exclusive selling rights, then it’s a no brainer. Even if Amazon is the only other seller, you can be pretty confident in commingling your inventory. If not, then check out the competition before you join the party.
Watch for Party Crashers
Certain party’s attract party crashers -- freeloaders trying to get in the door without an invitation. And some parties are easier to get into than others. The same is true for selling inventory. You know your products and which ones are known to have cheap imitations or knockoffs.
By nature, party crashers are cheapskates, so it makes sense that they would be likely to go the stickerless route when selling via FBA. If one of their products gets shipped for one of your orders, you could end up with bad reviews and A-to-Z claims for selling fraudulent products. Be prepared to provide proof of purchase and any other documentation that will validate that the products you’re selling are authentic.
Alternatives to Commingling
If you decide that commingling isn’t right for your business model, there are still alternatives. Obviously you can label your products yourself. If you sell case-packed items, you can get away with labeling the case instead of the individual units inside the case. Just make sure you’re using the case as shipped by the manufacturer -- Amazon frowns on improvised case packing of products.
If you find labeling individual units a hassle, time-consuming, or prone to errors, check out the FBA Label Service. This service is only available for products with scannable barcodes, such as ISBN, UPC, EAH, or JAN. You just send your inventory to Amazon and for a per-unit fee they’ll scan the barcodes and label them, matching them up with the offers you have listed on Amazon.
Making a Choice
Whether you decide to commingle or not will depend on what you're selling, who else is selling it, and how cost-effective it is for you to label inventory yourself. It also depends on your comfort level with risk. You do have the option to commingle products you feel safe about while labeling others yourself, and even using the FBA Label Service for others. Know your products, know your competition, and know your own capabilities and comfort level.