The History of Amazon FBA Prep Services

Around 2013, the first signs of dedicated prep services began to appear. At the time, most sellers were still preparing products themselves or working with small, informal operations. Larger sellers occasionally relied on third-party logistics providers (3PLs), but these were not specifically focused on Amazon FBA requirements.

As Fulfillment by Amazon continued to expand, more sellers began to look for ways to outsource product preparation. The growing complexity of Amazon’s requirements — including labeling, packaging, and shipping standards — made it increasingly difficult for sellers to manage everything on their own.

By 2015, a small but growing number of prep service providers had emerged to meet this demand. In 2015, SellerEssentials launched the first Amazon FBA prep services directory, identifying just 12 providers operating in the space at the time.

Between 2015 and 2018, the Amazon prep service industry began to expand rapidly. Several factors contributed to this growth.

Online arbitrage became a widely adopted sourcing strategy, with sellers purchasing products from retail websites and shipping them directly to prep centers. At the same time, Amazon actively promoted the use of FBA, encouraging more sellers to adopt the model.

Seller communities also played a role in accelerating the industry. Early online forums evolved into large Facebook groups where sellers shared strategies and experiences. Amazon seller conferences and networking events provided additional opportunities for information exchange, helping to spread awareness of prep services.

During this period, prep centers became more specialized, offering services tailored specifically to Amazon sellers, including inspection, labeling, bundling, and shipment preparation.

Sales tax considerations became an important factor in the growth of prep services early on. As sellers looked for ways to reduce costs when purchasing inventory, the location of a prep center became increasingly relevant.

States without statewide sales tax — particularly Montana — began to attract prep service providers. While tax-free strategies were discussed early in the development of prep services, Montana-based prep centers started appearing around 2015–2016 and saw significant growth beginning in 2018.

This led to a concentration of prep centers in certain locations, with sellers specifically seeking providers in tax-free states as part of their sourcing strategy.

Today, the Amazon prep service industry is significantly larger and more diverse than it was in its early stages. While hundreds of established prep centers operate in the United States, the broader landscape includes a much larger number of smaller or informal operations.

Some prep services operate at scale with dedicated warehouse facilities and structured workflows, while others may be smaller, independent operations serving a limited number of clients. In addition, some third-party logistics providers offer Amazon prep services alongside broader fulfillment capabilities.

There are also international prep service providers supporting sellers operating in global Amazon marketplaces.

At the same time, the growth of the industry has introduced new challenges. Sellers must be cautious when selecting a prep provider, as not all services operate with the same level of transparency or professionalism. Inexperienced sellers are sometimes targeted by illegitimate operators, particularly in online communities, making it important to verify the legitimacy of any prep service before sending inventory.