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U.S.

Amazon Ended Item Prep Services for FBA Sellers

Sellers must now manage product labeling and packaging in-house or hire third-party contractors.

Updated on Sept. 30, 2026 in Consumer Goods

Isometric editorial illustration of blank shipping boxes and packing rolls, representing a shift in e-commerce fulfillment logistics.
Amazon has terminated its item preparation services for FBA sellers, requiring merchants to manage product labeling, packaging, and bundle assembly in-house. AI Illustration. Upload story photo >

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Amazon ceased providing item preparation and labeling services for all US marketplace shipments effective January 1, 2026. Sellers utilizing FBA and Amazon Warehousing and Distribution programs are now responsible for all product assembly and packaging requirements.

Why it matters

This shift forces merchants to internalize fulfillment costs previously handled by Amazon or secure third-party prep services to ensure shipment eligibility. Improperly prepared inventory is now ineligible for reimbursement for damage or loss.

The DUG2 facility project in Redmond, Oregon, represents a $25 million investment and supports more than 300 regional jobs. Shipments arriving without proper prep and labeling are now ineligible for reimbursement in a market where turnarounds are typically 24 to 48 hours.

The players

Amazon

A global e-commerce and cloud computing corporation that operates the world's largest marketplace and distribution network.

The details

Under the new policy, sellers must personally apply FNSKU barcodes, poly bags, and bubble wrap to products before they reach Amazon facilities. Sellers are also required to assemble all sets and bundles at their own locations prior to shipping. This change impacts operations for those using Amazon Warehousing and Distribution, moving compliance responsibilities entirely to the merchant.

Timeline

  1. March 2024: Inbound placement service fee took effect.

  2. July 2025: Amazon announced the end of prep services.

  3. January 1, 2026: Amazon stopped offering item prep and labeling.

  4. September 15, 2026: Officials toured Amazon's DUG2 facility.

Market Landscape

This service discontinuation follows the pattern established by the 2024 inbound placement service fee, representing a further shift toward pushing logistical costs onto marketplace sellers. It reflects an industry trend where platforms reduce internal manual handling in favor of automated, seller-compliant inventory intake.

Operators must audit their current inventory workflows to ensure compliance with FNSKU and packaging rules to avoid losing reimbursement eligibility. Review your fulfillment budget to account for either the labor costs of in-house prep or fees charged by third-party contractors.

The takeaway

The end of Amazon-provided prep services necessitates a shift toward tighter operational control over product packaging. Sellers should establish a reliable third-party contract for prep services immediately to prevent shipment rejections or permanent loss of reimbursement rights.

Further reading

For more on managing retail logistics, visit the Consumer Goods section.

Source note: This article includes information reported by Cascade Business News.

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Do you believe large e-commerce platforms should be responsible for preparing goods for their own warehouses?