For years, Amazon FBA had a quiet safety net built into it. If a shipment showed up at a fulfillment center missing a barcode, or with a loose item that should have been in a polybag, Amazon would fix it. You paid a small fee per unit, usually somewhere between thirty cents and a dollar, and the problem went away. It was not glamorous, but it worked, and a lot of sellers built their entire operation on the assumption that it would always be there.
It is not there anymore.
On January 1, 2026, Amazon permanently discontinued all in-house FBA prep and labeling services across its U.S. fulfillment network. The policy was announced in late July 2025 and applies to every FBA shipment, including inventory routed through AWD, AGL, SEND, and the Supply Chain Portal. There is no fee based option to have Amazon handle it at the door. There is no exception program.
Amazon’s stated reasoning was that the vast majority of sellers already handle their own packaging and labeling, either themselves, through their manufacturing partners, or through third party providers, and that stepping back from prep lets fulfillment centers focus on moving product faster. That is probably true as a description of the market. It is cold comfort if you were in the minority.
What Amazon no longer does for you
The list is broader than most sellers realize. Amazon has stopped applying barcodes and product labels, bagging, bubble wrapping, boxing, providing opaque coverings, and creating sets, kits, or bundles.
That last item deserves a second look. Bundling and kitting were part of the prep program, which means anyone selling multipacks, gift sets, or variety bundles lost a service they may not have thought of as “prep” at all. If you sell a three pack, somebody has to assemble that three pack, label it as a single sellable unit, and make sure it arrives at Amazon looking exactly like the listing says it does. That somebody is now you or a partner you hire.
The real cost is not the prep fee. It is the failure mode.
Here is where the math gets uncomfortable.
Under the old system, a prep mistake was a minor inefficiency. Amazon caught it, charged you, and moved on. Under the new system, there is no catch. Units that arrive improperly prepped are returned to the seller at the seller’s expense or disposed of, with no reimbursement and no pay to fix option at the fulfillment center door.
And the penalties themselves have moved. Industry pricing analysis has tracked defect fees for standard size items climbing from roughly two to seven cents per unit into a range of thirty two cents to $1.74, with oversized product penalties reaching as high as $8.25 per unit.
Run that against a thousand unit shipment where the FNSKU labels were applied to the wrong SKU. That is not a rounding error. That is a month of margin.
Think about it the way a restaurant thinks about a health inspection. The inspection fee is trivial. Failing the inspection is what closes you for a week.
You have three real options
Do it yourself. This works, and plenty of sellers do it well. It also has a ceiling. Prep is labor that scales linearly with volume, which means every additional unit costs you the same amount of time as the last one. Sellers who handle prep in house tend to hit a wall where the prep work quietly eats the hours that used to go to sourcing, listings, and ads. The business stops growing and it takes a while to notice why.
Have your manufacturer do it at origin. Cheaper per unit, and increasingly common. The risk is that your quality control now lives on another continent, and Amazon will not fix a factory’s mistake. Once Amazon removed the correction service, the margin for factory error disappeared, which is why more sellers now build a verification step before goods leave the country. If your supplier misreads a spec sheet, you find out when a container of rejected inventory shows up on your doorstep.
Use a third party prep partner. This is the option most sellers land on once volume gets real, and it is the reason demand for outside prep services spiked overnight when the policy took effect. A dedicated prep operation absorbs the labor, carries the compliance knowledge, and removes the volume ceiling entirely.
If you want to see how that works in practice, Selery’s FBA prep service handles receiving, inspection, labeling, and packaging so inventory arrives at Amazon shelf ready.
What good prep actually looks like
Compliant prep is not complicated, it is just unforgiving. A solid workflow covers:
Receiving and inspection. Every carton opened, counted, and checked against the purchase order before anything gets labeled. Catching a short shipment or a damaged lot here costs you an email. Catching it at Amazon costs you a return.
FNSKU labeling. Correct barcode, correct placement, covering the manufacturer barcode so scanners do not read the wrong code. Scanner verified, not eyeballed.
Protective packaging. Polybags with suffocation warnings where required, bubble wrap on fragile items, opaque bagging for adult or sensitive products, boxing for anything liquid or breakable.
Set and bundle creation. Multipacks assembled, sealed, and labeled as a single unit with the right SKU. This is kitting work, and it is the piece most sellers underestimate.
Documentation. Photo records and count verification so that when something does go sideways, you have evidence rather than a guess.
What to ask before you hand off your inventory
Not every warehouse that says it does FBA prep is actually built for it. A few questions worth asking:
What is your accuracy rate, and how do you measure it? Anyone can say “we are careful.” Ask what percentage of units get scanner verified and what their defect rate looked like last quarter.
How fast does inventory move from dock to outbound? Prep is a bottleneck by nature. If your partner takes ten days to turn a container, you are carrying that delay in stockout risk and lost Buy Box time.
Where are you located relative to Amazon’s fulfillment centers? Shorter inbound transit means faster check in and less money spent on freight. Selery runs warehouses across Dallas, Houston, Chicago, Salt Lake City, Los Angeles, Orlando, and Charlotte, which shortens the trip for most Amazon inbound routes.
Can you handle bundles and inserts, not just labeling? If your catalog has any multipacks in it, this is a hard requirement, not a nice to have.
What happens if Amazon rejects a shipment you prepped? The answer tells you a lot about whether they stand behind their work.
The honest read on all this
Six months in, this change did not blow up the FBA ecosystem the way some people predicted. What it did was separate sellers who had real operational infrastructure from sellers who were quietly leaning on Amazon as a fallback. If you were already prepping properly, January 1 was a non event. If you were not, you have probably felt it.
The good news is that this is a solvable problem, and it is solvable at a cost that is almost always lower than what the mistakes would run you. Prep is not strategic work. It is not the thing that grows your brand. It is the thing that has to be right so the rest of the machine can run.
If you want to talk through what your prep volume would actually cost, get in touch or take a look at how our pricing works.