Some worrying news.

Amazon recently announced plans to hire 100,000 workers over the next two years. Most of these workers will be staffed in all the new warehouses that Amazon is building. It built 26 new warehouses in 2016 alone.

Amazon needs these warehouses to meet the surging demand for it’s Fulfillment By Amazon (FBA) service used by 3rd party online retailers. But there’s another reason behind the expansion that they aren’t talking about.

Retailers who use Amazon’s FBA service are automatically part of Amazon Prime, it’s wildly successful loyalty program.

The more retailers in Amazon Prime, the larger the selection of products that are eligible for free shipping.

The more products available via free shipping, the more new customers who want to join Amazon Prime.

As of July 2016, Amazon had 63 million prime members, each of whom spent $1200 vs $500 spent by non-prime members. So increasing warehouses is really about increasing the number of Prime customers.

The bad news for every other retailer is that customers who join Amazon Prime, end up drastically cutting down there spending with those retailers.

Instead they spend those dollars on Amazon. Overnight customers can be lost and business could take a huge revenue hit.

It’s kind of like a tsunami, it happens slowly at first and suddenly the water is everywhere moving swiftly.

The best defense against the Amazon Prime tsunami is to start building customer loyalty today. Start converting each new buyer into a loyal customer.

Offering rewards is the most effective way to fight this kind of competition. Especially when those rewards are offered using a customer-friendly rewards platform like RewardCamp.

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