In a major shift for sellers who rely on Fulfillment by Amazon (FBA), Amazon will discontinue its prep and labeling services effective January 1, 2026, affecting inventory sent through any fulfillment pathways, including AWD, AGL, SEND, and the Supply Chain Portal
Why the Change?
Amazon’s official rationale points to improved seller capabilities. Over time, more brands and sellers have taken packaging and labeling into their own hands or worked with third-party providers. By ending this service, Amazon aims to streamline operations and accelerate delivery timelines.
What’s at Stake for Sellers
- Increased Responsibility: After December 31, 2025, all FBA-bound inventory must be properly prepped and labeled before shipment, otherwise it faces rejection, delays, or even disposal.Carbon6+8repricer.com+8eFulfillment Service, Inc.+8.
- No More Reimbursements for Prep Errors: Inventory improperly prepared will not be eligible for compensation if damaged or mishandled.
- Operational Disruptions for Unprepared Sellers: Resellers with tight margins who previously leaned on Amazon for prep (e.g., its $0.55/unit FNSKU labeling) will now absorb additional costs and complexity.
A Boon for 3PL and Prep Services
This change is poised to benefit third-party prep services. As one LinkedIn-savvy commentator noted:
In our opinion, 3PL providers stand to gain the most. With millions of sellers now needing external prep solutions, these companies are poised for a major surge in demand, and revenue.
Action Plan for Sellers
Here’s how to stay ahead:
- Assess Current Reliance on Amazon Prep
Identify SKUs that currently depend on Amazon for labeling, polybagging, bundling, or other prep. - Choose a New Prep Strategy
Decide between scaling in-house prep or partnering with a trusted third-party logistics (3PL) provider that meets Amazon’s packaging guidelines. - Run Trial Shipments Early
Test shipments now to ensure proper labeling and compliance before the January 1 deadline - Explore Ships in Product Packaging (SIPP)
Participate in Amazon’s SIPP program where eligible products can ship in their own retail packaging, potentially reducing prep work - Set Up Internal Quality Checks
Implement checks to catch labeling or prep mistakes before inventory ships out. - Communicate Strategically with Your Team and Stakeholders
Keep internal teams or clients informed about shifts in logistics operations or costs.
Bottom Line
Amazon’s elimination of FBA prep and labeling services marks one of the most significant operational shifts in recent years. For sellers who act proactively, refining workflows, securing reliable prep partners, and adapting operations, this change can transition from a challenge into a competitive advantage.
