Amazon to End FBA Prep & Labeling Services by 2026: What Sellers Need to Know
In a major policy shift, Amazon has announced that it will discontinue its in-house Fulfillment by Amazon (FBA) prep and item labeling services for U.S. sellers starting January 1, 2026. This move affects all shipments to Amazon fulfillment centers—including those sent via AWD, AGL, Amazon SEND, and the Supply Chain Portal.
Here's a breakdown of what this change means for FBA sellers and how to stay compliant in a post-prep Amazon environment.
What's Changing?
Effective January 1, 2026:
Amazon will no longer offer prep and labeling services, including FNSKU application.
Sellers must ensure all inventory arrives fully prepped and labeled.
Shipments created before January 1, 2026 will still be eligible for Amazon's prep services, even if they arrive afterward.
Inventory that arrives without proper prep may be ineligible for reimbursements for lost or damaged units.
Why Is Amazon Making This Change?
In a letter shared with sellers, Amazon explained:
“The vast majority of Amazon sellers now handle their own packaging, including prep and item labeling, either on their own, through their own manufacturing partners or through third‑party service providers … To improve operational efficiency that ensures quicker delivery times for customers, we’re no longer planning to offer these prep and item labeling services within FBA.”
Amazon’s rationale is rooted in the growing independence of sellers in managing their own prep workflows. By stepping back from these services, Amazon is aiming to reduce fulfillment center bottlenecks and focus on faster, more streamlined delivery operations.
To read more, check out the article by EcommerceBytes: Amazon FBA Will No Longer Offer Prep Services - EcommerceBytes
What This Means for Sellers
This is a significant adjustment, especially for sellers who rely on Amazon’s prep services or ship directly from manufacturers. Seller feedback has highlighted concerns around increased costs and the need for new operational workflows.
Common concerns include:
Higher labor costs for DIY prep and labeling
Finding a reliable third-party prep provider
Risk of non-compliance leading to lost reimbursements
How Sellers Can Prepare
Now is the time to assess your supply chain and prep strategy. Here are five actionable steps to ensure you’re ready for the 2026 transition:
Evaluate Your Current Prep Dependency
Identify which SKUs require Amazon’s prep services today.
Understand Your Product Requirements
Determine if your items need poly bagging, bubble wrap, expiration labeling, etc.
Choose a Trusted 3PL or Prep Partner
A qualified third-party logistics provider can handle inspection, kitting, bundling, and FNSKU labeling.
Explore "Ships in Product Packaging" (SIPP)
This program allows eligible products to skip prep altogether, potentially lowering your fulfillment costs.
Monitor Reimbursement Eligibility
Ensure inventory is properly labeled to remain eligible for lost or damaged item claims.
Conclusion
Amazon’s decision to end prep and labeling services by January 1, 2026, marks a pivotal change in FBA operations. Sellers must adapt quickly by investing in internal capabilities or partnering with expert 3PL providers.
Staying informed and proactive is key to maintaining compliance and minimizing disruptions to your Amazon business.