Costco’s Move to SKU Flexibility and Smarter Sourcing; Amazon’s 2026 Fulfillment Fee Hike and Platform Changes

Costco is leaning hard into the flexibility of its product assortment to better navigate tariff headwinds. As its executive leadership explained, the company benefits from managing a limited number of SKUs, which allows it to shift or swap out items that become too costly under tariffs. It is also doubling down on its private-label Kirkland Signature line, as well as expanding domestically sourced goods across categories such as health and beauty, mattresses, live goods, and tires. These moves give Costco agility to respond to cost pressures without overhauling its entire catalog.

At the same time, Costco is consolidating supplier relationships and moving production to alternative origins when possible. In some cases, the retailer reports it has achieved 30-40% savings by narrowing its supplier base. Its global reach—nearly a third of its business operates overseas—gives it leverage to work with international partners to offset some of the cost burdens. Small brands can imitate these moves by focusing on owned brands, limiting SKUs, and moving to a smaller number of efficient suppliers.

Beginning January 15, 2026, Amazon is set to raise average fulfillment fees across multiple services, including Fulfillment by Amazon (FBA), Buy with Prime, and Multi-Channel Fulfillment. According to Supply Chain Dive, the increases will be modest, such as $0.08 per unit on average, though certain size and price tiers will see higher adjustments - small items priced above $50 may face a $0.51 jump, for instance. Amazon is also refining its fee regime for inbound placement and bulky items, introducing more granular tiers that may reduce costs in some cases while raising them in others.

Amazon frames the changes as investments in enhanced forecasting, automation, returns processing, and faster delivery capabilities. It suggests sellers can mitigate impact by optimizing packaging, choosing lower-cost inbound shipping options, and improving inventory health. The company is also increasing storage costs in certain regions and adjusting Buy with Prime and MCF fulfillment fees. For sellers, this development adds pressure to adapt operations, cost structures, and fulfillment strategies as Amazon’s fulfillment ecosystem evolves and margin leverage tightens.