Amazon has formally announced that, beginning January 1, 2026, it will no longer provide prep and labeling services for FBA shipments in the United States. This news has already prompted serious chatter in the seller community — and it should.While this shift might not be totally surprising, the impact on the way sellers manage their operations, logistics, and compliance is significant.
Here’s what you need to know, what it means to your company, and how you can get ahead of the curve now.
The Announcement: What’s Changing?
As per Amazon’s official communication, all inventory sent to US FBA warehouses — whether directly by sellers or routed through Amazon Warehousing and Distribution (AWD), Amazon Global Logistics (AGL), Amazon SEND, or the Supply Chain Portal — will no longer receive prep or item labeling services from Amazon itself.
This means services like bagging, bubble wrapping, taping, or applying FNSKU labels — which many sellers have relied on for convenience and compliance — will no longer be handled by Amazon.
Why Is Amazon Making This Change?
According to Amazon, this move is a result of observable shifts in the manner sellers handle their own packaging and labeling. With time, as Amazon extended its prep services to aid smaller or less capable sellers, the environment has evolved. Sellers now have solid systems in place or have aligned with third-party service providers who are FBA compliance experts.
Amazon also made clear that cutting these services will enable it to simplify its fulfillment operations and concentrate on core activities such as picking, packing, and shipping.
That is, Amazon is cueing a shift away from being an operational one-stop shop—and putting the onus of prep firmly back in the seller’s hands.
The Real Impact: What This Means for Sellers
Whereas some experienced sellers already employ third-party prep centers or prep in-house, other businesses — particularly small-to-medium-sized businesses — have relied on Amazon’s prep offerings. The unexpected loss of these services presents a multitude of new challenges:
Greater Operational Burden: Sellers are now responsible for prepping and labeling all units properly prior to their delivery to the FBA warehouse. An error could result in rejected inventory, held inventory, or fined inventory.
Increasing Costs: Outsourcing to 3PLs or prep houses introduces a new cost factor that sellers need to factor into their margins. Amazon’s internal services tended to be competitively priced, particularly for lower volumes.
Time Sensitive: Vendors will need to manage tighter schedules and coordination of suppliers, prep services, and FBA check-in time without the prep buffer offered by Amazon.
Compliance Risk: Poor labeling or under-prep can lead to spoiled inventory, missed buy box opportunities, or account health warning when products are not able to pass through as FBA-eligible.
In short, this adjustment may reshape the way vendors budget, plan inventory, and manage supply chains—particularly in a high-volume, margin business like Amazon.
How Smart Sellers Are Responding
The most proactive sellers are already pivoting their strategies. Rather than waiting until Q4 of 2025 (which will likely be chaotic), they’re making moves now. These include:
Auditing Current Processes: Reviewing their supply chain workflows to identify where prep or labeling currently depends on Amazon, and estimating how this will affect cost and turnaround time.
Partnering with Prep Centers or 3PLs: Building relationships with trusted service providers that can take over prep and labeling responsibilities. Early partnerships can lock in capacity and pricing before demand spikes.
Training Internal Teams: For brands with warehousing capabilities, internal teams are being trained to follow Amazon’s FBA prep guidelines meticulously to avoid compliance issues.
Shifting Prep Upstream: Some sellers are working with manufacturers — especially overseas — to handle FNSKU labeling and packaging at the source, which saves both time and handling costs.
This is also a great time for sellers to revisit their packaging efficiency. The more streamlined, standardized, and durable your packaging, the fewer issues you’ll face down the road.
A Shift Toward Operational Maturity
Zooming out, this move by Amazon is part of a broader trend: pushing sellers toward greater operational independence and maturity. Just as Amazon has tightened rules around inventory limits, restock timing, and storage fees, this latest update reinforces the idea that long-term success on Amazon now requires more than just great products — it demands serious backend efficiency.
This won’t just affect individual sellers. Prep centers, 3PLs, and supply chain consultants are also likely to see increased demand, presenting both opportunities and challenges in scaling to meet seller needs.
Final Thoughts: Plan Now, Not Later
While January 2026 may seem far off, the transition away from Amazon prep services should start now. Sellers who wait until the last minute risk getting caught in a scramble for prep partners, training time, and supply chain adjustments.
This is your time to future-proof your business. Assess your present dependencies, tighten your logistics plan, and ensure your team or partners can manage this transition.
Because on Amazon — as everywhere in e-commerce — those who move early keep winning.
