Amazon Commingling Programme - if you participate, tell your accountant!
What do I need to know about the Amazon Inventory Commingling Programme?
You can go straight to the source here; in summary, enabling Amazon Commingled Inventory lets Amazon be slightly more efficient in how it handles inventory for certain products that are identical and sold by multiple sellers.
From an accounting point of view, it has some crucial consequences that are going to impact your VAT bill.
How does it relate to my VAT bill?
Enrolling on the Amazon Inventory Commingling Programme will result in inter-seller transactions which are:
- reportable, and
- handled incorrectly will increase your VAT bill.
The relevant passage from Amazon:
If you participate in the FBA Commingling programme, items in your inventory may be swapped with identical items owned by Amazon Retail or other FBA Sellers who have also elected to participate in the programme.
When an order is fulfilled with a commingled item, two (additional) VAT transactions must be reported:
“Commingling_Sell”: Payable VAT related to the disposal of a product to another FBA seller (or Amazon Retail), participating in the Commingling Programme.
“Commingling_Buy”: Input VAT related to the acquisition of a product from another FBA seller (or Amazon Retail), participating in the Commingling Programme.
At Ecommerce Accountants if you are an Amazon Seller you're in good hands and we will handle these transactions correctly without any intervention needed from you. If you are using invoice posting tools it is worth checking that you have configured these transactions correctly, and have notified your accountant, so that your VAT gets calculated correctly.