Amazon FBA Prep Services Ending by Jan 1, 2026

Amazon recently announced a major policy change that will impact millions of FBA sellers in the US. Starting January 1, 2026, Amazon will discontinue prep and labeling services for FBA shipments.

This is one of the most significant changes that Amazon has made in their seller program in recent years. If you've been relying on Amazon to handle your product preparation, you're likely wondering how this affects your business operations and profitability.

The reality is that this change, while challenging, presents opportunities for sellers who plan ahead. Let's break down everything you need to know about this transition and how to navigate it successfully.

What Amazon FBA Prep Services Are Being Discontinued

Services Amazon Will Stop Providing

After December 31, 2025, Amazon will no longer offer these prep services:

1. Product packaging
2. FNSKU labeling and application
3. Shipment preparation
4. Prep quality inspection
5. Polybagging services
6. Bubble wrap protection

Critical Timeline for Sellers

Understanding the transition timeline is essential for planning:

• Through December 31, 2025: All current prep services remain available
• January 1, 2026: New requirements take effect immediately
• No grace period: Unprepared products may be rejected after this date

Amazon has provided sellers approximately 16 months to adapt their fulfillment processes.

Why Amazon Made This Strategic Decision

Operational Efficiency

Amazon cites several reasons for this change in their seller communications:

• Seller capability improvement: Many sellers now handle prep independently
• Faster shipping times: Streamlined processes can reduce delivery delays
• Cost optimization: Amazon can focus resources on core fulfillment services
• Scalability: Reducing prep bottlenecks improves overall system efficiency

Industry Trend Alignment

This decision reflects broader ecommerce trends, with many established Amazon sellers already handling their own prep or working with third-party services.

How Different Seller Segments Are Affected

Small-Scale Sellers (Under 1,000 Units Monthly)

Primary challenges:

• Learning complex prep requirements from scratch
• Initial investments to set up the supply chain
• Higher per-unit costs when outsourcing
• Time management for manual prep processes

Immediate action items:

• Audit current prep needs across product catalog
• Research local prep service providers
• Calculate cost implications for different approaches

Mid-Volume Sellers (1,000-10,000 Units Monthly)

Strategic advantages:

• Sufficient volume to negotiate competitive prep service rates
• Flexibility to test in-house vs. outsourced approaches
• Opportunity to optimize costs and control quality

Key considerations:

• Determine warehouse space requirements
• Assess staff training needs for in-house prep
• Analyze total cost of ownership for all options

High-Volume Sellers (10,000+ Units Monthly)

Significant opportunities:

• Eliminate Amazon's prep fees from cost structure
• Gain complete control over timing and quality standards
• Potential for substantial cost savings with proper setup

Strategic focus areas:

• Evaluate direct manufacturer prep partnerships
• Consider automated prep solutions
• Optimize supply chain integration

Three Strategic Options for FBA Prep Transition

Option 1: In-House Prep Operations

Setting up a proper prep operation on your own requires planning but offers maximum control.

Essential requirements:

• Dedicated workspace (can start small and scale)
• FNSKU label printer (thermal printers recommended)
• Poly bags meeting Amazon specifications
• Bubble wrap and protective packaging materials
• Quality control checklists

Investment breakdown:

• Startup costs: $500-$2,000 depending on volume
• Per-unit costs: $0.15-$0.45 including labor
• Time investment: 2-5 minutes per item once processes are optimized

Best practices for success:

• Create standard operating procedures for each product type
• Set up quality control checks
• Track prep time and costs for optimization
• Train multiple team members to avoid bottlenecks

Option 2: Third-Party Prep Services

Professional prep services can provide expertise and scalability without capital investment.

What quality prep services offer:

• Deep knowledge of current Amazon requirements
• Capacity to handle seasonal volume fluctuations
• Quality control systems
• Integrated with inventory management tools

Services like AMZ Prep, which has positioned itself as one of the best FBA prep alternatives, offer comprehensive solutions specifically designed for the post-Amazon prep landscape.

Selection criteria for prep services:

• Amazon compliance track record
• Geographic proximity to your inventory
• Technology integration capabilities
• References from similar-sized sellers

Option 3: SIOC (Ships in Own Container) Optimization

The most cost-effective solution is products that require no additional prep.

SIOC qualification requirements:

• Product packaging protects item during shipping
• Meets Amazon's packaging and labeling guidelines
• Fits standard shipping box dimensions
• No additional prep or labeling needed

Benefits of SIOC products:

• Zero prep costs after transition
• Faster processing through Amazon facilities
• Reduced packaging waste
• Optimized packaging to elevate the customer experience

Steps to achieve SIOC status:

• Work with manufacturers on packaging design
• Test shipments through Amazon's SIOC program
• Optimize product dimensions for shipping efficiency
• Update product listings with proper packaging information

Financial Impact Analysis

Based on industry data, most sellers find optimal approaches around these volume thresholds:

• Under 2,000 units/month: Third-party services often most cost-effective
• 2,000-5,000 units/month: In-house prep becomes viable
• 5,000+ units/month: Significant savings potential with optimized in-house operations

Common Prep Mistakes That Cost Money

Labeling Compliance Issues

Amazon's labeling requirements are specific and strictly enforced:

• FNSKU placement: Must be in designated locations per product type
• Label quality: Must withstand shipping and handling
• Barcode readability: Proper contrast and print quality essential
• Size specifications: Exact dimensions required for different label types

Packaging Problems

Inadequate protection leads to rejections:

• Fragile items with inadequate protective materials
• Poly bags not meeting Amazon's safety requirements
• Incorrect case pack quantities
• Missing or improper hazmat documentation

Quality Control Failures

Prevention strategies:

• Perform multi-point assessments to ensure quality
• Document procedures with photos and checklists
• Train staff on common rejection reasons
• Regular audits of prep quality metrics

Challenges Faced by Sellers as Amazon Stops FBA Prep Services

Heavier Operational Load

Sellers now face a bigger share of operational work, handling all product prep themselves or coordinating with third-party partners.

Added Expenses

This shift brings extra costs—either by outsourcing prep or investing in in-house facilities for packaging and labeling.

Risk of Rejections and Delays

Improper prep increases the chance of rejected or delayed shipments, disrupting Amazon delivery timelines.

Greater Inventory Risk

Responsibility for inventory damage or losses now lies with sellers, making strict quality control a must.

Possible Supply Chain Setbacks

If adjustments aren’t made quickly, prep changes can cause supply chain disruptions.

More Complex Logistics

Managing compliance across multiple categories and fulfilment programs adds new layers of logistical challenges.

Competitive Disadvantage

Slow adopters may fall behind competitors who streamline prep processes effectively.

Training Demands

Sellers must dedicate resources to train staff or partners to consistently meet Amazon’s strict standards.

How AMZ Prep Has Prepared to Handle the FBA Prep Transition

As one of the leading FBA prep alternatives, AMZ Prep has been strategically positioned to support sellers through this major transition. 

Understanding that millions of sellers will need reliable prep solutions starting January 2026, the company has made significant investments in capacity, technology, and expertise.

Strategic Capacity Expansion

Infrastructure development:

• Expanded warehouse facilities near major Amazon fulfillment centers to reduce shipping time and shipping costs
• Increased processing capacity to handle the anticipated surge in demand from displaced Amazon prep users
• Geographic coverage across key markets to serve sellers nationwide
• Scalable operations designed to handle both everyday volume and peak season spikes

Advanced Technology Integration

Modern systems for seamless operations:

• Real-time inventory management and tracking that integrates with popular seller tools
• Automated prep workflows based on Amazon's specific requirements for each product category
• Photo documentation of all prep work for quality assurance and dispute resolution
• Transparent billing systems that provide detailed breakdowns of all services and costs

Specialized Amazon Expertise

Deep FBA knowledge:

• Amazon compliance specialists who stay current on all prep requirement changes
• 99.5% accuracy rate on prep compliance to minimize rejections and delays
• Dedicated account management for higher-volume sellers requiring customized solutions
• Quality control processes that exceed Amazon's minimum standards

Comprehensive Service Portfolio

Beyond basic prep services:

• FNSKU labeling with precise placement according to Amazon guidelines
• Protective packaging for fragile items using appropriate materials
• Poly bagging with proper safety warnings and ventilation requirements
• Case pack breakdown and reorganization for optimal FBA shipments
• Multi-channel prep for sellers using Walmart, eBay, and other platforms

Competitive Pricing Structure

Value-focused approach:

• No hidden fees or monthly commitments that don't add value
• Volume-based pricing aligned with your business expansion
• Transparent pricing starting at $0.50 per unit for basic prep services
• Flexible service selection allowing you to choose only what you need

The company's proactive approach to this industry shift demonstrates their commitment to becoming the go-to solution for sellers transitioning away from Amazon's prep services. 

Their combination of expanded capacity, advanced technology, and deep Amazon expertise positions them as arguably the best FBA prep alternative for sellers of all sizes.

Top Amazon FBA Prep Centers in North America

Need a reliable prep partner after Amazon's service discontinuation? The right FBA prep center handles everything from product labeling to packaging compliance, saving you time and preventing costly mistakes.

Discover the top Amazon FBA prep centers that offer professional preparation services, fast turnaround times, and Amazon compliance expertise to seamlessly replace Amazon's discontinued prep services.

1. AMZ Prep - Premier Choice

Location: 12+ warehouses across US, Canada, Dubai, UK

Description: Canada's largest Amazon-focused 3PL with exceptional global reach and infrastructure. Boasts industry-leading 99.95% fulfillment accuracy rate and offers comprehensive services including both FBA and FBM fulfillment. Their extensive network of warehouses across four countries provides unmatched flexibility for international sellers and those looking to expand globally. AMZ Prep stands out for their proven track record, scalability, and ability to handle high-volume operations while maintaining precision and reliability.

Prep Time: 24-48 hours

Key Advantages: Global presence, highest fulfillment accuracy, comprehensive service suite, scalable infrastructure

2. YYZ Prep

Toronto-based fulfillment partner focused on making shipping "as easy as possible" with cross-border North American expertise

3. LBOE Prep

Smaller 3PL specializing in Amazon FBA prep with transparent pricing model (no hourly charges) and cost-effective growth focus

4. PrepFBA

Local California-based player specializing in domestic US Amazon FBA with consulting services like photography

5. California FBA Prep Service

Small business focused on "meat and potatoes" FBA services - labeling, picking, packing, shipping with experienced team since 2006

6. Prep It! Pack It! Ship It!

One of the first Amazon FBA fulfillment centers on West Coast, offering omni-channel fulfillment to multiple platforms

What Next for Amazon Sellers?

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Phase 1: Assess & Decide (September - October 2025)

September: Business Audit

• Catalog your products and prep requirements
• Choose your primary strategy (in-house, third-party, or SIOC)
• Research potential partners or solutions

October: Strategic Plan

• Finalize vendor selection or internal setup
• Begin contract negotiations
• Establish backup options

Phase 2: Test & Refine (November - December 2025)

November: Run Pilots

• Test your chosen approach with small batches
• Monitor quality and compliance rates
• Document what works and what doesn't

December: Streamline Your Process

• Refine procedures based on test results
• Train your team on new workflows
• Prepare for full launch

Phase 3: Launch & Optimize (January 2026+)

January: Go Live

• Execute full transition on schedule
• Monitor performance closely
• Address issues immediately

Optimizing for Success Beyond 2026

Long-Term Strategic Considerations

This transition presents opportunities to improve your overall business operations:

Supply chain optimization

• Work directly with manufacturers on prep-ready packaging
• Reduce handling steps between production and fulfillment
• Streamline inventory planning for better forecasting
• Develop multi-channel prep capabilities for platform diversification

Quality and brand control

• Implement higher quality standards than Amazon's minimum requirements
• Customize packaging for brand enhancement
• Reduce damage rates through improved prep procedures
• Create competitive advantages through superior customer experience

Staying Ahead of Future Changes

Amazon continues evolving their seller requirements. Successful sellers build adaptable systems:

Best practices for long-term success:

• Regularly review Amazon policy updates
• Build relationships with multiple prep service providers
• Maintain flexibility in your prep approach
• Invest in systems that can adapt to changing requirements

Final Thoughts

As FBA prep services are to be discontinued by this year end (Dec. 31, 2025), you are now free to manage your fulfillment strategy. Considerations such as collaborating with fulfillment facilities, establishing an in-house team, or utilizing 3PLs result in improved cost control and quality. 

Considering both the busy season and possible challenges, it is crucial to plan in advance. By remaining proactive, this transition may present an opportunity to enhance efficiency, secure long-term development, and establish resilience. Achieve a more competitive advantage with flexible fulfillment.

FAQs:

When did Amazon start providing prep services?

Amazon initially introduced prep services in 2019. The service was designed to assist sellers with preparing their products for FBA (Fulfillment by Amazon). It aimed to streamline the process of meeting Amazon's packaging and proper labeling requirements.

When will Amazon FBA prep services end? After December 31, 2025, Amazon will no longer offer product packaging, item labeling services such as FNSKU labeling and application, shipment preparation, prep quality inspection,  polybagging services, and bubble wrap protection.

What can Amazon sellers do now to prepare for this change?

Contact third-party service providers such as AMZ Prep who have the FBA expertise, infrastructure, and modern technology to create cost-effective and efficient fulfillment center operations for Amazon FBA sellers.