If you sell products online and ship through Amazon or from overseas, two changes in the last year have fundamentally rewritten the rules of your supply chain. Amazon discontinued all FBA prep and labeling services on January 1, 2026. The U.S. government ended the de minimis exemption on August 29, 2025. Separately, either one would force sellers to rethink how they operate. Together, they've pushed thousands of small and mid-sized businesses to rebuild their logistics from the ground up.
Two structural changes hit ecommerce supply chains in 2025–2026. The U.S. de minimis exemption ended on August 29, 2025, so every imported package — not only those over $800 — now clears formal customs and pays applicable duties. Amazon discontinued all FBA prep and labeling services on January 1, 2026, shifting responsibility for FNSKU labels, poly bagging, and compliance back onto sellers or onto third-party prep centers. The two together have raised effective landed cost 10–35% on imported inventory and pushed sellers to consolidate shipments and use U.S.-based prep partners.
What Is the De Minimis Exemption and Why Did It End?
For years, the de minimis exemption allowed packages valued under $800 to enter the United States duty-free with minimal customs paperwork. It was designed for an era when low-value imports were rare. That era ended a long time ago.
By 2024, over 1.36 billion packages per year were entering the U.S. under the de minimis threshold. That works out to roughly 3.7 million packages every single day bypassing customs. Platforms like Temu and Shein built their entire business models around this loophole, shipping individual orders direct from China to American doorsteps without paying a dollar in duties.
The government shut it down. First for China and Hong Kong in May 2025, then for every country on August 29, 2025. The impact was immediate. The number of low-value parcels entering the U.S. dropped by 54% according to the Universal Postal Union. Several countries — including France, Germany, Japan, and Austria — temporarily suspended certain parcel shipments to the U.S. entirely.
For online sellers, the math changed overnight. Tariff rates now range from 10% to 50% depending on country of origin. Every shipment requires full customs documentation, including commercial invoices, tariff classifications, and certificates of origin. Shipping individual orders from overseas is no longer a viable model for most businesses.
The practical result is a mass shift toward bulk importing and domestic warehousing. Instead of shipping one package at a time from a factory overseas, sellers are sending full containers to U.S. facilities and fulfilling orders locally.
What Happened to Amazon FBA Prep Services?
On July 28, 2025, Amazon announced it would end all prep and labeling services for FBA shipments in the United States, effective January 1, 2026. No more FNSKU labeling. No more poly bagging. No more bubble wrapping, bundling, or compliance prep handled by Amazon.
Their stated reason was that most sellers had improved their own packaging capabilities and no longer needed Amazon's help. Practically speaking, Amazon offloaded a massive operational burden back onto its seller base so it could run leaner, faster warehouses.
The consequences are real. Every unit shipped to Amazon's fulfillment centers must now arrive fully prepped and labeled to their exact specifications. Products that show up non-compliant get rejected, returned, or hit with per-unit fees. And starting in 2026, non-compliant shipments are no longer eligible for reimbursement if items are lost or damaged inside Amazon's facilities.
For many sellers — especially those new to FBA or running high-SKU operations — this was the first time they had to think about prep logistics at all.
How These Two Changes Collide for Small Ecommerce Sellers
Consider a seller who, 18 months ago, was running a common and perfectly functional supply chain: source products from an overseas manufacturer, ship individual orders direct to U.S. customers duty-free under de minimis, and let Amazon handle the prep when inventory went into FBA. That entire model is now broken.
Today, that same seller has to:
- Pay tariffs on every inbound shipment regardless of value
- File full customs documentation on every import
- Ship inventory in bulk to a U.S. warehouse instead of direct to consumers
- Handle all prep, labeling, bagging, and compliance before anything goes to Amazon
- Bear the financial risk of any mistakes in that process
This is not a minor adjustment. It's a completely different business operation. Sellers who haven't adapted are falling behind — rejected shipments, compliance penalties, slower inventory turnover, and shrinking margins.
Why 3PL Fulfillment Demand Is Surging
The numbers tell the story clearly.
Globally, the 3PL market is projected to reach $2.57 trillion by 2034. According to a 2024 Extensiv benchmark survey, 22% of 3PLs offering FBA prep services reported high profitability growth that year.
The supply side is feeling the pressure too. Roughly 60% of logistics providers report operating at over 90% capacity. Warehouse space in high-demand regions is scarce and getting more expensive. Sellers who wait to find a prep partner may find fewer options and higher prices.
What Is a 3PL and How Does It Work for Amazon Sellers?
A third-party logistics provider sits between your supplier and Amazon's fulfillment centers. The process is straightforward.
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Inbound Receiving
Your supplier ships inventory to the 3PL facility, either from overseas or domestically. The 3PL receives the shipment and inspects every unit for quantity, quality, and condition.
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Prep & Label
They apply all required FNSKU labels, poly bag or shrink wrap products to Amazon's specifications, bundle multi-packs, and run a final compliance check against current Amazon rules.
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Ship to FBA
Prepped inventory ships directly to the correct Amazon fulfillment center, cutting handoffs and tightening your in-stock window.
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Customs Buffer
For sellers affected by the de minimis changes, a U.S.-based 3PL also solves the customs problem at the same time. You import inventory in bulk once, clear customs once, and warehouse it domestically. Orders ship from U.S. soil — faster delivery, no per-order customs processing, and significantly better margins than shipping individual parcels internationally.
The best 3PLs also act as a buffer against Amazon's ever-changing compliance requirements. When Amazon updates its prep standards (and they update frequently), a good prep partner absorbs that complexity so you don't have to.
How Much Does FBA Prep Cost?
Third-party FBA prep pricing typically falls into these ranges:
For context, Amazon's own former prep fees were comparable, and sellers were already absorbing those costs. The difference now is that a dedicated prep partner typically delivers faster turnaround, higher accuracy, and near-zero rejection rates because that's their entire business. Amazon was doing it as a side service.
The real cost to consider is what happens without a prep partner. A rejected shipment means return shipping fees, delayed inventory availability, lost sales velocity, and potential account health penalties. Those costs add up faster than any per-unit prep fee.
How to Choose the Right FBA Prep Center
Not every 3PL is equipped for Amazon prep work. If you're comparing providers, here's what separates the ones that protect your business from the ones that create new problems.
The most important number. A good prep partner should be at or near zero Amazon rejections. Every rejected shipment costs time, money, return fees, and potentially your account health.
Some facilities take one to two weeks. Others turn units around in 24 to 48 hours. That speed gap directly impacts how fast your products are available and how quickly you recover cash flow.
Volume will fluctuate — holiday rushes, launches, viral moments. A prep partner needs to absorb spikes without delays or quality drops. Ask what their capacity looks like during peak seasons.
A dedicated point of contact who knows your account is worth more than the most sophisticated dashboard. You want a person you can call, not a ticket system.
Geography matters too. A facility in the Southeast can reach a large portion of Amazon's fulfillment network at lower shipping rates than providers on either coast.
Frequently Asked Questions
The de minimis exemption was a U.S. trade rule that allowed imported packages valued under $800 to enter the country duty-free with minimal customs processing. It was eliminated on August 29, 2025 for all countries.
Yes. Amazon discontinued all prep and labeling services for U.S. FBA shipments on January 1, 2026. All inventory must now arrive fully prepped and labeled before reaching Amazon's fulfillment centers.
A third-party logistics provider is a company that handles warehousing, fulfillment, and shipping on behalf of other businesses. For Amazon sellers, a 3PL can receive inventory, prep it to Amazon's specifications, and ship it directly to the correct fulfillment center.
Typical third-party FBA prep pricing ranges from $0.50 to $0.80 per unit for standard items, covering receiving, inspection, labeling, and packaging.
Amazon returns non-compliant shipments at the seller's expense. As of 2026, items in non-compliant shipments are no longer eligible for reimbursement if lost or damaged. Repeated issues can affect your seller account health score.
A zero rejection rate, 24 to 48 hour turnaround, scalability for volume changes, a dedicated point of contact, and a location that offers favorable shipping rates to Amazon's fulfillment network.
The U.S. de minimis exemption ended on August 29, 2025 for all countries. After that date, every imported package — regardless of value — must clear formal customs entry, pay applicable duties and tariffs, and meet HTS classification, country-of-origin marking, and documentation requirements.
FBA sellers importing inventory from China, Vietnam, Mexico, or any other country are now paying duties on every shipment, including small replenishment orders that previously cleared duty-free under $800. Effective landed cost on a $100 import has risen 10% to 35% depending on tariff rate. Sellers who previously batched daily small shipments are consolidating into larger less-frequent shipments to reduce per-shipment customs overhead.
Yes. Amazon FBA is still operating. What changed is that Amazon no longer prepares or labels inventory for sellers — that responsibility shifted to the seller or to a third-party prep center on January 1, 2026. Sellers can still send inventory to FBA fulfillment centers and have Amazon pick, pack, and ship it; they just have to deliver it fully prepped and FNSKU-labeled.
Consolidate. With de minimis gone, every shipment carries fixed customs and brokerage costs (commonly $50–$150 per entry plus duty). Larger less-frequent shipments amortize that fixed cost across more units. A 40-foot ocean container with a single customs entry is dramatically cheaper per unit than 50 small air-freight packages, even at higher transit times. For sellers who can't justify a full container, an LCL (less-than-container-load) consolidator collects multiple shippers into one bonded entry.
HTS (Harmonized Tariff Schedule) classification is the 10-digit code U.S. Customs uses to assign a duty rate to an imported product. The same item can fall under multiple plausible codes with very different duty rates — sometimes a 2.5% gap, sometimes a 25% gap. Misclassification leads to duty underpayment, penalties, and shipment holds. Now that every package crosses formal entry, HTS accuracy directly affects landed cost and supply-chain cycle time.
Every unit shipped to Amazon FBA must arrive with a valid FNSKU label, in compliant packaging (poly bag with suffocation warning where required, bubble wrap for fragile items, sealed packaging for ingestibles), with the correct master-carton labeling and box-content information. Items missing prep are returned at the seller's expense and are no longer eligible for reimbursement if lost or damaged inside Amazon's network.
The Long-Term Picture
These changes are not temporary. The de minimis exemption is not coming back. Amazon is not reversing its decision on prep services. These are permanent, structural shifts in how ecommerce logistics works in the United States.
The sellers who are thriving right now are the ones who consolidated their logistics early. They found a partner who handles receiving, inspection, prep, labeling, compliance, and shipping to Amazon under one roof. They stopped trying to manage five different vendors and started working with one team that owns the entire process.
The question is not whether to adapt. It's whether you do it now — while you can choose the right partner and negotiate the right terms — or later, when capacity is tighter and the options are worse.
Need a prep partner that doesn't drop shipments?
Simple Distribution is a 3PL and Amazon FBA prep provider based in Selmer, Tennessee. 17 years in fulfillment. 99.5% order accuracy. 24 to 48 hour prep turnaround. Zero Amazon rejection rate.