How Amazon FBA Works (2025–2026) What Sellers Must Know About Prep, Inbound Routing & Storage Costs

WHAT AMAZON FBA IS & HOW THE SYSTEM WORKS IN 2025–2026

Amazon FBA was designed to solve a simple problem for sellers: “If I send inventory to Amazon, they will store it and ship it for me.” In 2025–2026, that simple story is still true at a high level—but the details have become much stricter and more expensive.

At its core, Fulfillment by Amazon (FBA) means:

• You create FBA shipments in Seller Central or via API.
• You prepare, label, and pack units, cartons, and pallets according to Amazon’s rules.
• You route inventory into one or more fulfillment centers (FCs) using small parcel delivery (SPD), LTL, or FTL.
• Amazon receives and stows your units, then ships customer orders and handles basic customer service and returns.

In exchange, you pay:

• Fulfillment fees per order (pick, pack, outbound shipping to the customer).
• Monthly storage fees based on cubic feet and time of year.
• Aged Inventory Surcharge (AIS) when inventory sits beyond specific age tiers.
• Placement and inbound-related fees when Amazon redistributes units across FCs or shipments arrive with defects.

For cross-border brands, FBA is both a growth engine and a risk amplifier . Prime eligibility and FBA Buy Box preference can lift conversion, but a single failure in prep, routing, or capacity planning can create:

• 7–15 day restock delays.
• Unexpected AIS and storage bills.
• Inbound defect charges and shipment rejections.
• Lost Best Seller Rank (BSR) and slower recovery after stockouts.

To understand how Amazon FBA really works now, it helps to view it as a three-part system :

If you manage these three stages deliberately, FBA behaves like a predictable engine. If you treat them as background details, FBA becomes an expensive black box sitting between your factory and your buyers.

FBA PREP REQUIREMENTS (2025–2026 UPDATE)

FBA prep used to be simpler. In 2025–2026, Amazon has tightened every rule around packaging, labeling, carton specs, pallet specs, and shipment accuracy —and Amazon is ending its internal FBA Prep services by early 2026 .

That means:
All prep must be done correctly before inventory reaches the FC. Amazon will not fix your issues. They will reject, charge, or delay the shipment.

1. Unit-Level Prep Requirements

Every individual sellable unit must meet the following standards:

• FNSKU barcode must be scannable and not covered by other barcodes.
• Suffocation-warning polybags required for loose items or small textiles.
• Bubble wrap required for fragile units.
• Items with sharp edges must be securely protected .
• Expiration-dated goods must have MM-DD-YYYY printed and visible.

Amazon grades prep accuracy heavily. Repeated issues increase your defect rate and lead to inbound defect fees .

2. Carton Requirements (2025 Update)

Amazon increased its carton dimension limits in 2025:

• Maximum length: 36" (up from 25")
• Maximum side lengths: 25" × 25"
• Maximum carton weight: 50 lbs unless marked as “Team Lift” or “Mechanical Lift”

Cartons violating these limits are frequently:

• Refused at the FC.
• Returned at your expense.
• Subject to inbound defect fees .

3. Pallet Requirements (2025–2026)

• Standard pallet size: 40" × 48"
• Maximum pallet height: 72" including pallet
• Maximum pallet weight: 1,500 lbs
• Pallets must meet GMA Grade B+ or better
• Mixed-SKU pallets require proper labeling and must follow Amazon’s mixed-carton rules

Non-compliant pallets face:

• Appointment cancellation
• Rejection at dock
• Re-delivery fees
• Delay penalties

4. Labeling Requirements

All cartons and pallets require properly placed labels:

• FBA carton labels (2 per carton, opposing sides)
• Pallet labels (4 sides)
• SPD/LTL/FTL carrier labels
• Fragile indicators when necessary

Improper placement or low print quality leads to scan failures and lost shipments.

5. Documentation Requirements

Amazon increasingly checks:

• Carton content accuracy
• SKU-level quantities
• ASN matching
• Routing plan consistency

Mismatches trigger manual review and receiving delays.

HOW TO PREP YOUR INVENTORY FOR FBA — STEP BY STEP

The workflow below represents what high-performing cross-border brands follow in 2025–2026. It reduces inbound defects, prevents rejections, and keeps replenishment cycles predictable.

Step 1 — FNSKU Assignment & Packaging Decisions

Before production finishes, confirm:

• Whether each SKU uses manufacturer barcode or FNSKU
• Required protective materials
• Whether variations need bundling
• Packaging thickness to survive U.S. carrier handling

Step 2 — Factory-Level Labeling (If Possible)

The cheapest and most accurate place to apply FNSKU is the factory. If the factory cannot meet accuracy standards, redirect prep to a professional U.S. 3PL.

Step 3 — Cartonization with Amazon's 2025 Rules

Ensure:

• Dimensions stay within 36" × 25" × 25"
• Weight stays under 50 lbs
• Carton labels match ASN exactly
• Fragile units are individually protected

Step 4 — Palletization to Amazon Standard

When shipping LTL/FTL, ensure:

• Pallet height ≤ 72"
• Pallet weight ≤ 1,500 lbs
• 4-side labeling is complete
• Stretch wrap is tight and stable

Step 5 — Shipment Creation & Routing Plan

Amazon may split units across multiple FCs. Expect extra cost if:

• SKUs are oversized
• Shipments are large and mixed
• You decline “Amazon-optimized” placement

Step 6 — Pre-Arrival Check (Most Missed Step)

Before the truck arrives at the FC:

• Ensure routing plan matches actual cartons/pallets
• Confirm no label mismatch
• Remove all non-Amazon barcodes
• Confirm appointment times for LTL/FTL

Step 7 — Arrival & Receiving

Amazon typically checks:

• Carton dimensions
• Label readability
• Pallet stability
• ASN accuracy

Any mismatch leads to delays or rejection.

AMAZON FBA INBOUND ROUTING (SPD / LTL / FTL)

Amazon inbound logistics is now one of the most rule-heavy parts of the FBA lifecycle. Errors here lead directly to:

• FBA rejections
• Inbound defect fees
• 7–20 day receiving delays
• Restock limits tightening

1. Small Parcel Delivery (SPD)

SPD is the simplest method but also the easiest to mess up at scale. Amazon expects:

• Carton dimensions within 36" × 25" × 25"
• Weight under 50 lbs
• 2 carton labels placed on opposite sides
• Accurate carton content information

SPD is ideal for:

• Fast-turn SKUs
• Small units
• Replenishments under 200–500 units

2. LTL (Less-than-Truckload)

LTL is more efficient for larger shipments but adds complexity:

• Appointment scheduling required
• Palletization must follow Amazon’s strict rules
• Pallets must match routing plan quantities

Amazon rejects LTL loads when:

• Pallet wrapping is loose
• Pallet labels are missing
• Mixed-SKU pallets are not documented

3. FTL (Full Truckload)

FTL is best for:

• High-volume sellers
• Single-SKU bulk shipments
• Oversize categories

FTL faces the highest scrutiny. Any mismatch or documentation error slows unloading. Many FCs will refuse the load entirely if the truck misses its appointment window.

4. Amazon Routing Plan (Most Sellers Misunderstand This Part)

Amazon may assign 2–5 FCs for a single SKU. It also now charges: placement fees when sellers request easier consolidation.

Routing is based on:

• ASIN size tier
• Historical demand
• FC load balancing
• Seller inbound accuracy history

2025 CARTON & PALLET REQUIREMENTS

Amazon updated its receiving standards again in 2025. These rules directly influence whether your shipments are accepted or flagged for delays.

1. Carton Limits

• Maximum length: 36"
• Other sides: 25" × 25"
• Maximum weight: 50 lbs

2. Carton Quality

• 32 ECT minimum
• No crushed edges
• No mixed barcodes

3. Pallet Rules

FBA only accepts:

• 40" × 48" pallets
• GMA Grade B+ or higher
• Maximum 72" height including pallet
• Maximum 1,500 lbs per pallet

4. Mixed-SKU Cartons & Pallets

Mixed-SKU cartons are discouraged but allowed with proper labeling. Amazon requires:

• Carton-level content accuracy
• Proper mixed-SKU labels
• Clear ASN documentation

FBA STORAGE FEES (2025–2026 STRUCTURE)

Storage fees have become a major cost driver for FBA sellers. Amazon now charges by:

• Cubic feet
• Time of year
• Inventory age (AIS)

1. Monthly Storage Fees (Typical Ranges)

Peak-season multipliers apply, and slow-moving inventory becomes disproportionately expensive.

2. Inventory Aging (AIS)

Amazon replaced Long-Term Storage Fees (LTSF) with a tiered Aged Inventory Surcharge (AIS) .

AIS is one of the biggest hidden killers of FBA margin. Many sellers unknowingly accumulate AIS during slow seasons or when scaling new SKUs.

RESTOCK LIMITS & IPI IN 2025–2026

Amazon uses restock limits and the Inventory Performance Index (IPI) to control FC capacity. Both have tightened in 2025–2026.

1. Restock Limits

Restock limits vary by:

• Storage type (standard, oversize, apparel, footwear)
• Historical sell-through
• Seasonality
• ASIN-level performance

When limits drop:

• You cannot create new inbound shipments.
• You must wait for sell-through.
• You may be forced to liquidate or remove stock.

2. IPI Score (2025–2026)

The IPI threshold is:

• 400 in 2025
• expected to shift to 350 in early 2026 based on internal performance models

IPI is influenced by:

• Excess inventory percentage
• Sell-through
• Stranded inventory
• In-stock rate on top sellers

Cross-border sellers often struggle with IPI because forecasting is harder at long distance, and inbound delays compound quickly.

COST & RISK REDUCTION PLAYBOOK FOR FBA SELLERS

The following playbook consolidates what consistently works for high-performing FBA brands.

1. Keep Only 30–45 Days of Stock in FBA

This minimizes AIS and peak storage. Use a U.S. 3PL as the primary buffer.

2. Replenish Weekly or Biweekly

Frequent small replenishments reduce:

• Storage fees
• AIS risk
• Restock limit pressure

3. Upgrade Prep Accuracy

Prep mistakes are the #1 cause of inbound delays. Fixing them prevents:

• Rejections
• Inbound defect fees
• Slower replenishment cycles

4. Validate Carton Dimensions Before Shipping

Amazon strictly enforces 36" × 25" × 25". Oversized cartons trigger defects and rework fees.

5. Avoid Overstocking High-DIM SKUs

These products accumulate AIS faster than they sell.

6. Bundle FBA + FBM + DTC in One U.S. 3PL

This creates:

• Unified inventory
• Flexible routing
• Safer launch windows
• Lower cost during slow periods

7. Use Multi-Node Storage Outside FBA

Keeping bulk stock outside FBA avoids AIS and protects IPI.

CASE STUDY — FBA STORAGE COST REDUCTION

FAQ — TOP QUESTIONS ABOUT AMAZON FBA

1. How long does Amazon take to receive inventory?

Typical: 2–7 days . During Q4: 7–20 days .

2. What causes FBA inbound delays?

• Incorrect carton dimensions
• Poor labeling
• Missing ASN info
• Peak-season overload

3. Is AIS avoidable?

Mostly yes. Use a 3PL buffer and keep only 30–45 days in FBA.

4. Should I use manufacturer barcode or FNSKU?

FNSKU gives more control but requires strict prep accuracy.

5. How do I avoid restock limits?

• Improve sell-through
• Reduce excess inventory
• Fix stranded inventory quickly
• Maintain strong prep accuracy

CONCLUSION: FBA IS A DISCIPLINE, NOT A SHIPPING ADDRESS

Amazon FBA rewards sellers who treat it as a precise operational system. The brands that win are those that:

• Prep inventory correctly before Amazon ever sees it
• Route inbound loads in compliant, well-planned batches
• Keep FBA storage low and predictable
• Use a U.S. 3PL buffer to stabilize replenishment

For cross-border brands, FBA is even more sensitive because delays compound across oceans, time zones, and customs.

If you want a structured way to stabilize your FBA operations, reduce storage cost, and speed up inbound cycles, you can request a free review from WinsBS.

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