In a significant shift for its vast e-commerce empire, Amazon.com Inc. has decided to phase out a longstanding fulfillment practice known as commingling, which has drawn sharp criticism from third-party sellers for years. This policy allowed the company to pool identical products from multiple sellers into a single inventory bin, ostensibly to streamline shipping and reduce costs. However, it often led to issues like counterfeit goods mixing with authentic ones, damaging seller reputations and eroding customer trust.

The decision, announced recently, comes amid mounting pressure from sellers who have long argued that commingling exposes them to risks beyond their control. For instance, if a counterfeit item from one seller ends up in a customer’s order, the legitimate seller could face negative reviews or even account suspensions. According to reporting from GeekWire, Amazon plans to implement this change gradually, starting with certain product categories before a full rollout by mid-2026.

The Roots of Seller Frustration and Regulatory Scrutiny This move underscores broader tensions in Amazon’s marketplace, where third-party sellers account for more than half of all sales. Critics, including antitrust watchdogs, have pointed to commingling as a symptom of Amazon’s dominance, potentially stifling competition by forcing sellers to rely on its fulfillment network without adequate safeguards against fraud.

Amazon’s fulfillment-by-Amazon (FBA) program, which handles storage and shipping for sellers, benefited immensely from commingling by optimizing warehouse space and speeding up deliveries. Yet, as e-commerce boomed during the pandemic, reports of fake products surged, prompting lawsuits and seller forums to erupt with complaints. One seller advocacy group estimated that commingling-related issues cost merchants millions annually in lost sales and refunds.

Sellers have experimented with workarounds, such as opting for “stickerless” inventory separation, but these added fees and complexity. The policy’s end could level the playing field, encouraging more sellers to participate without fear of counterfeit contamination. As noted in a Wikipedia overview of Amazon criticisms, such practices have fueled broader accusations of anti-competitive behavior, echoing past controversies like the company’s 1-Click patent disputes.

Implications for Amazon’s AI-Driven Future and Seller Relations With this change, Amazon appears to be addressing seller pain points at a time when it’s rolling out new AI tools to aid inventory management and advertising, as detailed in another GeekWire article. These agentic AI features could help sellers predict demand more accurately, potentially offsetting any logistical hiccups from ending commingling.

Industry analysts view this as part of Amazon’s strategy to retain its seller base amid intensifying competition from platforms like Walmart and Shopify. Regulatory scrutiny, including ongoing FTC investigations into Amazon’s marketplace practices, likely played a role. Ending commingling might appease regulators by demonstrating proactive reforms, reducing the risk of fines or forced divestitures.

For sellers, the phase-out promises greater control over their inventory’s integrity, but it may increase fulfillment costs if Amazon raises fees to compensate for less efficient warehousing. Small businesses, in particular, could feel the pinch, as they rely heavily on FBA’s economies of scale. A blog post from AMZ Sellers Attorney highlights similar challenges in 2025, such as policy compliance and return abuses, suggesting that while this fix addresses one grievance, others persist.

Broader Market Shifts and Long-Term Outlook Amazon’s decision aligns with other recent adjustments, like curtailing shared Prime shipping benefits outside households, as reported by The Verge. These tweaks reflect a company fine-tuning its model under pressure from shareholders and activists, who have pushed for better workplace and environmental policies, per GeekWire‘s coverage of the 2025 shareholder vote.

Ultimately, phasing out commingling could enhance Amazon’s reputation as a fair marketplace, attracting higher-quality sellers and bolstering consumer confidence. However, insiders caution that without complementary measures, such as stricter vendor verification, the underlying issues of counterfeits may linger. As Amazon navigates this transition, its ability to balance efficiency with accountability will be closely watched by sellers, regulators, and competitors alike, potentially reshaping e-commerce dynamics for years to come.