What the heck is commingling? Commingling is where the same product from multiple vendors are mixed together.
How is this relevant to Amazon? Amazon has a service called Fulfillment by Amazon (or FBA) which allows vendors to "store [their] products in Amazon's fulfillment centers, and [Amazon will] pick, pack, ship, and provide customer service for these products”. (link to Amazon Services). FBA is important to vendors because its products are then eligible for Amazon Prime and Free Super Saver Shipping.
When a vendor selects FBA, Amazon’s default position is to allow commingling of products; a vendor must specifically opt out of commingling. Why would Amazon default to allow commingling? Because, it allows Amazon to be more efficient. Amazon can reach into any of its warehouses and ship a product, instead of having to ship a specific product from a specific vendor from a specific warehouse.
By defaulting to permit commingling, Amazon creates a potential counterfeit issue that affects brand owners who fail to opt out of commingling. A nefarious party can select FBA, ship its counterfeit products to Amazon, and those products will be mixed with a vendor’s true products. When a customer orders a product and receives a counterfeit product, the brand owner suffers the customer’s wrath. Not Amazon.
This isn’t a hypothetical issue. A number of stories have examined the commingling issue at Amazon (link 1, link 2, link 3).