diff --git a/features/merchant/backend-api/src/migrations/1736505599000-InitialSchema.ts b/features/merchant/backend-api/src/migrations/1736505599000-InitialSchema.ts
new file mode 100644
index 000000000..90537330a
--- /dev/null
+++ b/features/merchant/backend-api/src/migrations/1736505599000-InitialSchema.ts
@@ -0,0 +1,157 @@
+import { MigrationInterface, QueryRunner } from 'typeorm'
+
+/**
+ * Migration: InitialSchema
+ *
+ * Creates the merchant_products and merchant_product_variants tables
+ * with all required enums and indexes.
+ */
+export class InitialSchema1736505599000 implements MigrationInterface {
+  name = 'InitialSchema1736505599000'
+
+  public async up(queryRunner: QueryRunner): Promise<void> {
+    // Create uuid-ossp extension if not exists
+    await queryRunner.query(`CREATE EXTENSION IF NOT EXISTS "uuid-ossp"`)
+
+    // Create product type enum
+    await queryRunner.query(`
+      DO $$
+      BEGIN
+        IF NOT EXISTS (SELECT 1 FROM pg_type WHERE typname = 'merchant_products_producttype_enum') THEN
+          CREATE TYPE "merchant_products_producttype_enum" AS ENUM (
+            'physical_merchandise',
+            'physical_accessory',
+            'digital_product',
+            'gift_card',
+            'subscription'
+          );
+        END IF;
+      END$$;
+    `)
+
+    // Create product status enum
+    await queryRunner.query(`
+      DO $$
+      BEGIN
+        IF NOT EXISTS (SELECT 1 FROM pg_type WHERE typname = 'merchant_products_status_enum') THEN
+          CREATE TYPE "merchant_products_status_enum" AS ENUM (
+            'draft',
+            'coming_soon',
+            'available',
+            'out_of_stock',
+            'archived'
+          );
+        END IF;
+      END$$;
+    `)
+
+    // Create inventory type enum
+    await queryRunner.query(`
+      DO $$
+      BEGIN
+        IF NOT EXISTS (SELECT 1 FROM pg_type WHERE typname = 'merchant_products_inventorytype_enum') THEN
+          CREATE TYPE "merchant_products_inventorytype_enum" AS ENUM (
+            'unlimited',
+            'limited',
+            'unique'
+          );
+        END IF;
+      END$$;
+    `)
+
+    // Create variant type enum
+    await queryRunner.query(`
+      DO $$
+      BEGIN
+        IF NOT EXISTS (SELECT 1 FROM pg_type WHERE typname = 'merchant_product_variants_varianttype_enum') THEN
+          CREATE TYPE "merchant_product_variants_varianttype_enum" AS ENUM (
+            'size',
+            'color',
+            'style',
+            'custom'
+          );
+        END IF;
+      END$$;
+    `)
+
+    // Create merchant_products table
+    await queryRunner.query(`
+      CREATE TABLE IF NOT EXISTS "merchant_products" (
+        "id" uuid NOT NULL DEFAULT uuid_generate_v4(),
+        "sku" character varying(100) NOT NULL,
+        "name" character varying(255) NOT NULL,
+        "description" text NOT NULL,
+        "longDescription" text,
+        "productType" "merchant_products_producttype_enum" NOT NULL,
+        "category" character varying(100),
+        "tags" text,
+        "basePriceUsd" numeric(10,2) NOT NULL,
+        "minPriceUsd" numeric(10,2),
+        "maxPriceUsd" numeric(10,2),
+        "allowCustomAmount" boolean NOT NULL DEFAULT false,
+        "basePriceTokens" integer NOT NULL DEFAULT 0,
+        "inventoryType" "merchant_products_inventorytype_enum" NOT NULL DEFAULT 'unlimited',
+        "inventoryQuantity" integer,
+        "inventoryReserved" integer NOT NULL DEFAULT 0,
+        "lowStockThreshold" integer,
+        "status" "merchant_products_status_enum" NOT NULL DEFAULT 'draft',
+        "featured" boolean NOT NULL DEFAULT false,
+        "sortOrder" integer NOT NULL DEFAULT 0,
+        "thumbnailUrl" character varying(500),
+        "previewImages" text,
+        "totalSales" integer NOT NULL DEFAULT 0,
+        "metadata" jsonb,
+        "createdAt" TIMESTAMP NOT NULL DEFAULT now(),
+        "updatedAt" TIMESTAMP NOT NULL DEFAULT now(),
+        "publishedAt" TIMESTAMP,
+        "archivedAt" TIMESTAMP,
+        CONSTRAINT "PK_merchant_products" PRIMARY KEY ("id"),
+        CONSTRAINT "UQ_merchant_product_sku" UNIQUE ("sku")
+      )
+    `)
+
+    // Create indexes for merchant_products
+    await queryRunner.query(`CREATE INDEX IF NOT EXISTS "idx_merchant_product_sku" ON "merchant_products" ("sku")`)
+    await queryRunner.query(`CREATE INDEX IF NOT EXISTS "idx_merchant_product_type" ON "merchant_products" ("productType")`)
+    await queryRunner.query(`CREATE INDEX IF NOT EXISTS "idx_merchant_product_status" ON "merchant_products" ("status")`)
+
+    // Create merchant_product_variants table
+    await queryRunner.query(`
+      CREATE TABLE IF NOT EXISTS "merchant_product_variants" (
+        "id" uuid NOT NULL DEFAULT uuid_generate_v4(),
+        "productId" uuid NOT NULL,
+        "variantType" "merchant_product_variants_varianttype_enum" NOT NULL,
+        "variantValue" character varying(100) NOT NULL,
+        "variantLabel" character varying(100) NOT NULL,
+        "priceModifierUsd" numeric(10,2) NOT NULL DEFAULT 0,
+        "priceModifierTokens" integer NOT NULL DEFAULT 0,
+        "hasSeparateInventory" boolean NOT NULL DEFAULT false,
+        "inventoryQuantity" integer,
+        "isDefault" boolean NOT NULL DEFAULT false,
+        "sortOrder" integer NOT NULL DEFAULT 0,
+        "colorHex" character varying(7),
+        "isActive" boolean NOT NULL DEFAULT true,
+        "createdAt" TIMESTAMP NOT NULL DEFAULT now(),
+        "updatedAt" TIMESTAMP NOT NULL DEFAULT now(),
+        CONSTRAINT "PK_merchant_product_variants" PRIMARY KEY ("id"),
+        CONSTRAINT "FK_merchant_variant_product" FOREIGN KEY ("productId")
+          REFERENCES "merchant_products"("id") ON DELETE CASCADE ON UPDATE NO ACTION
+      )
+    `)
+
+    // Create index for variants
+    await queryRunner.query(`CREATE INDEX IF NOT EXISTS "idx_merchant_variant_product" ON "merchant_product_variants" ("productId")`)
+  }
+
+  public async down(queryRunner: QueryRunner): Promise<void> {
+    // Drop tables in reverse order (variants first due to FK)
+    await queryRunner.query(`DROP TABLE IF EXISTS "merchant_product_variants"`)
+    await queryRunner.query(`DROP TABLE IF EXISTS "merchant_products"`)
+
+    // Drop enums
+    await queryRunner.query(`DROP TYPE IF EXISTS "merchant_product_variants_varianttype_enum"`)
+    await queryRunner.query(`DROP TYPE IF EXISTS "merchant_products_inventorytype_enum"`)
+    await queryRunner.query(`DROP TYPE IF EXISTS "merchant_products_status_enum"`)
+    await queryRunner.query(`DROP TYPE IF EXISTS "merchant_products_producttype_enum"`)
+  }
+}