Amazon Ends Commingling: A New Era for Fulfilment

Amazon has begun phasing out its commingling program, marking a significant shift in how products are stored and fulfilled through FBA. For years, commingling allowed Amazon to group identical products from different sellers under a single shared inventory, using the manufacturer’s barcode as the identifier. When a customer placed an order, the closest matching unit was shipped, regardless of which seller originally supplied it.

Under this system, companies faced both operational and tax challenges. While commingling simplified logistics and allowed faster order fulfilment, it often meant that sellers lost visibility and control over which specific units were shipped.

From a VAT perspective, tracking ownership and movements of goods was difficult, complicating compliance and reporting obligations and leaving businesses exposed to substantial VAT risks (for example, where own stock would be moved into a Member State in which the supplier of the goods is not VAT registered).

Why Is Amazon Ending Commingling?

Although commingling offered efficiency, it carried significant risks. Counterfeit or damaged goods could enter shared inventory and inconsistent product quality sometimes led to customer complaints, meaning legitimate sellers could be penalised for issues beyond their control.

By ending commingling, Amazon aims to improve supply chain transparency, strengthen traceability, and rebuild trust in the marketplace, benefiting both businesses and customers.

The New System: FNSKU Barcodes

Under the updated model, inventory will no longer be shared between sellers. Each product stored in Amazon’s fulfilment centres must carry a unique Amazon barcode (FNSKU) that directly links the units to its seller.

This change improves ownership tracking, reduces counterfeit risks, and ensures that customer feedback is tied solely to the responsible seller.

Operational Implications for Sellers

For sellers, the shift introduces new workflows. Those who previously relied on manufacturer barcodes must now apply FNSKU labels before shipment or opt for Amazon’s labelling services. Although this adds additional preparation steps, the separation of inventory is expected to create a more reliable and consistent customer experience over time.

VAT Compliance Considerations

For sellers, compliance will now be more straightforward than under the current commingling system.

When inventory was pooled, ownership of same was often unclear, and VAT reporting could be ambiguous, increasing the risk of errors, penalties, or audits.

With FNSKU barcodes, accountability will be precise, requiring businesses to ensure that their VAT registrations, filings, and reporting accurately reflect the movement of goods through Amazon’s fulfilment network.

Sellers will now have to maintain comprehensive records of inventory, shipments, and returns, to demonstrate clear ownership and traceability.

This is particularly critical for companies operating across multiple countries or engaging in cross-border fulfilment, where different reporting requirements apply.

Businesses should implement internal controls to reconcile Amazon reports with their VAT filings, monitor stock movements in real time, and retain supporting documentation for all transactions to satisfy potential tax authority inquiries.

Furthermore, VAT authorities will now be able to directly link each sale to the responsible seller, reducing uncertainty while raising the expectation for accurate and thorough reporting.

Schlussfolgerung

The end of commingling represents more than a technical update, it is a structural shift toward greater accountability, fairness, and product integrity within Amazon’s ecosystem. While the process requires adjustments across logistics and compliance, it ultimately reinforces a more secure and dependable marketplace.

If you wish to discuss any VAT related issues with respect to this change, please do not hesitate to contact Meridian Global VAT Services and we will be happy to assist you.