Amazon Ends Commingling: A Major Win for Sellers and Brands

In a move that received the loudest applause at Amazon’s annual Accelerate conference for sellers, the e-commerce giant announced it will end its long-controversial “commingling” inventory practice. This decision, revealed by Nadya Dhalla, director of Supply Chain by Amazon, marks a significant shift in how Amazon manages its vast logistics network and addresses concerns that have plagued brands for over a decade. While the conference featured impressive new AI tools designed to reduce sellers’ manual workload, it was this traditional logistics change that resonated most deeply with attendees who have long struggled with the downsides of inventory pooling.

For those unfamiliar with the term, commingling in Amazon’s ecosystem refers to the practice of pooling identical items from different sellers under a single manufacturer barcode, then shipping whichever unit is closest to the customer regardless of who supplied it. The system was originally designed with efficiency in mind – speeding up deliveries, optimizing warehouse space, and reducing costs for sellers. However, this convenience came with serious drawbacks that have increasingly outweighed the benefits. The most concerning issue has been the risk of authentic products being mixed with counterfeit, damaged, expired, or otherwise compromised items from less reputable sellers. This has created significant challenges for brand integrity and customer trust, leading many prominent companies to take drastic measures to protect their reputations. Johnson & Johnson temporarily pulled many consumer products from Amazon in 2013 over concerns about expired goods, while brands like Tovolo, Wüsthof, and Bose implemented various restrictions to prevent their products from being mixed with unauthorized or counterfeit items.

Until now, the only way for sellers to avoid commingling was through an expensive and labor-intensive process known as “re-stickering” – applying unique Amazon barcodes (FNSKUs) to every product. This ensured their inventory remained separate, but at a tremendous cost: Amazon estimates that brand owners spent $600 million in the past year alone just to avoid commingling. Dharmesh Mehta, Amazon’s vice president of selling partner services, revealed in an interview that ending commingling has been a goal for years, but the decision hinged on a complex cost-benefit analysis. For a long time, the overall efficiency gains and sales increases from faster shipments outweighed the costs incurred by sellers wanting to opt out. However, several significant developments have finally shifted this balance.

The factors that tipped the scales against commingling reflect Amazon’s evolving business landscape. First, the company’s logistics network has become dramatically more efficient at placing inventory close to customers, reducing the need for pooled inventory to speed deliveries. Second, a larger proportion of sellers are now brand owners who disproportionately opt out of commingling to protect their product quality and reputation. Finally, and perhaps most importantly, Amazon’s technological capabilities have advanced to the point where its systems can now virtually track individual units throughout the network, making it possible to trace and route specific products without physically mixing inventory from different sellers. These changes collectively rendered the original benefits of commingling obsolete while its disadvantages remained significant, leading Amazon to conclude that the practice no longer made sense in today’s environment.

The elimination of commingling represents more than just an operational change—it signifies a meaningful shift in Amazon’s relationship with brands and sellers. When the transition is completed later this year, customers who buy from a specific seller will receive a product that seller actually supplied, and any returns will come from that same inventory. This addresses a fundamental concern about accountability in the marketplace and removes a significant barrier to brand protection. For brands, the change eliminates the expensive workaround of re-stickering while providing newfound flexibility to manage inventory across multiple sales channels. The decision has been welcomed by industry analysts, with some calling it one of the most significant steps Amazon has taken in years to protect brands on its platform.

This policy change reflects a broader trend in Amazon’s evolution as it matures as a platform. While the company has always prioritized customer experience and operational efficiency, it’s increasingly recognizing that protecting brand integrity and seller confidence is essential to long-term success. By eliminating a practice that forced brands to choose between efficiency and control, Amazon is acknowledging that its future growth depends not just on scale and speed, but on creating an ecosystem where quality and authenticity are preserved. As e-commerce continues to evolve, this shift away from commingling may represent a turning point in how online marketplaces balance efficiency with brand protection, potentially influencing industry standards well beyond Amazon’s own platform.