August 8, 2025
by Shannon Curley
PROVIDENCE, R.I. – For most sellers, the news that Amazon is exiting the FBA prep business come January 2026 doesn’t come as a shock. Anyone who’s been paying attention over the past few years has likely witnessed the trend of Amazon quietly untangling itself from anything that slows down its fulfillment engine.
After all, who can forget that according to Amazon’s own marketing, the “P” in ASAP stands for “Prime”. Prep, on the other hand, has always been a fulfillment friction point; it’s messy, SKU-specific, operationally tedious, and full of outliers.
Despite being unsurprising, however, the move still feels significant; Not because it changes what Amazon is, but because it reinforces what Amazon is not. It’s not interested in absorbing your operational headaches.
Let’s talk about the update. Starting January 1, 2026, Amazon will no longer handle prep; subsequently, it has said that any unprepped or mislabeled shipments from this date on will not be eligible for reimbursement if lost or damaged. That’s a strong message, and for many, especially those who have relied on Amazon’s prep in wholesale or AWD (the all-in-one solution, remember?), this means get it right the first time or face the consequences.
To avoid any potential profit hits, sellers should start preparing now. Even if you’ve only used Amazon prep occasionally, you’ll want to flag every touchpoint in your inbound flow that assumes Amazon is there to clean up the rough edges. Are SKUs being labeled upstream? Who’s handling box content accuracy? Where do you rely on fallback support?
This is also the moment when your 3PL starts to matter a lot more. Prep is not a nice-to-have. It’s not a checkbox. It’s a complex, error-sensitive workflow that requires precision, compliance, and deep Amazon knowledge. There’s a big difference between a 3PL that’s built for FBA and one that just says they are.
Why Is Amazon Doing This?
By removing prep from their fulfillment centers, Amazon increases speed, reduces accountability, and simplifies operations. But there’s also a quiet incentive structure at play. This move nudges more sellers toward SIPP (Ships in Product Packaging). It encourages direct-from-manufacturer workflows. It rewards brands that figure out labeling earlier in the supply chain. And it removes one more layer of “support” Amazon has to maintain. The fewer exceptions, the faster the machine moves.
For some sellers, this will be a real headache, especially for those receiving shipments directly from brands or distributors who don’t handle labeling. For others, particularly those who’ve already outsourced prep to a 3PL or built it in-house, it’s more of a liability shift than a full-on operational crisis. But either way, it’s a shift that can’t be ignored.
On the macro level, I am interested in how changes like this slowly open a tiny bit of space for other marketplaces to gain ground, especially in the conversion of “seller-first” platforms and “partner” marketplaces. To be sure, Walmart, TikTok Shop, and Target Plus are still far away from becoming the marketplaces of choice for ecommerce sellers, but moves like this certainly make you think about where you’re putting your inventory and why. Make sure your FBA prep is handled ahead of the January deadline.
Shannon Curley is director of Marketing and Growth at Tactical Logistic Solutions (a Prosper Show exhibitor), while also running her own consulting business.
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