Amazon Ends FBA Prep & Labeling in 2026: What Founders and Brands Need to Know
On January 1, 2026, Amazon will stop offering prep and item labeling services for Fulfillment by Amazon (FBA) shipments in the U.S. [source]. This change applies to all inventory entering FBA, including shipments through Amazon Warehousing and Distribution (AWD), Amazon Global Logistics (AGL), Amazon SEND, and Supply Chain Portal.
For new and growing CPG companies, this is a fundamental shift in how you package products before they reach Amazon’s fulfillment centers. AMZ Prep calls it “the biggest logistics change for sellers since FBA launched over a decade ago.”
What’s Changing
For years now, Amazon has offered optional prep services like labelling, bubble wrap, bagging, etc. to help sellers prep products for FBA. That’s going away because, Amazon says, “we’ve seen a significant improvement in seller packaging capabilities and a reduced need for our prep services" allowing them “to improve operational efficiency that ensures quicker delivery times for customers” [source].
Here’s the high-level:
Every product must arrive delivery-ready: prepped, labeled, and compliant.
No reimbursement: shipments without proper labeling and prep will be ineligible for reimbursement if items are lost, untraceable, or damaged.
There’s a transition window: shipments created before 1/1 will be covered, even if they arrive after the deadline.
Why It Matters
Larger companies may absorb this will little friction. Most have already outsourced or established FBA prep practices. But for new and emerging brands the stakes are different:
Compliance risk. Improper prep can mean rejected shipments, delays, or lost inventory
Added costs. Outsourcing to prep centers adds per-unit fees; doing it yourself means added overhead through labor, training, and space.
Operational strain. Early-stage brands already juggle co-packers, warehousing, and distribution, and this is another supply chain factor to layer on.
Tasks that will now fall on brand owners include:
FNSKU labeling
Bubble-wrapping
Poly-bagging
Taping/Sealing
Kitting/Multipacking/Variety packing
Stickering for Warnings/Instructions
As Supply Chain Dive put it, this shift “places more responsibility — and risk — on sellers, particularly small businesses who had relied on Amazon’s prep services to stay compliant” [source].
What You can Do
Option 1 – Do it yourself
Early-stage brands may be asking if they can take on the burden to avoid additional costs. As always, you can trade your time for money, increasing your sweat equity or labor contributions. See Amazon’s page here for guidance.
Option 2 – Hire a 3PL/Restack provider
Hiring a 3PL partner is an inevitable part of scaling in CPG. The reason many brands will weather this change easily is because they’ve already grown to this point. While it adds to your costs, you ensure compliance, efficiency, and resilience.
Additional Considerations
You can consider reducing your prep needs by enrolling in Amazon’s SIPP program (Ships in Product Packaging). Eligible products can skip certain steps and potentially reduce fulfillment costs.
You may also consider manufacturer prep. In our experience though, co-manufacturers and suppliers tend to stray away from that kind of additional touch. More often than not, they’re not built for it or interested in it.
How to Prepare Now
We’re closing in on the holiday season, and you’ll want to start preparing for this transition asap.
Here are the action items we advise:
Audit your situation to determine which SKUs rely on Amazon for prep/labeling
Perform cost-model analyses to compare in-house prep vs 3PL centers
Explore partnerships early because B2B sales cycles can take time.
Final Word
Amazon’s change is a disruption, but it’s part of a broader shift. Major platforms are streamlining their operations for efficiency on their end. This pushes more responsibility and cost onto sellers.
It's also an opportunity for founders, a chance to get ahead, tighten operations, and align with partners who can keep products compliant, efficient, and ready for scale.
Our Role
We’ve worked to build our organization for moments like this.
From kitting and variety packing to relabeling and storage, we already offer the prep services Amazon is walking away from, with a hands-on, white-glove approach. Our 3PL + distribution model is flexible and can fold into your brand’s exact stage of growth. More than anything, we believe in a community mindset, building and supporting an ecosystem that elevates brands that deserve to be seen.
But first and foremost, we’re here to advise. Get in touch for a free consultation.