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Let's get rid of the error so you can change the category of an item in QuickBooks, Hanson.
There's a possibility that the item already exists. However, it's inactive in the system.
Let's activate your inventory list on the Product and Services page. Here's how:
Once done, all your inactive inventory will display. Locate the ones that you want to make inactivate.
You can either make it active. If you want to leave it inactive, consider changing the product name. This way, the system won't detect a duplicate entry when updating the category of the other item.
Also, the system only allows you to merge a service item.
I'm adding these links for future guide:
Stay in touch with me if you need anything else aside from changing the category of an item. I'll be right here to help you.