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Amazon Business, an operation under the umbrella of Amazon’s services, has grown as a popular procurement tool for businesses and organizations over the past few years. It’s marketed as an experience akin to that of Amazon.com, allowing users to find, compare, and easily purchase a wide variety of products needed by businesses. In reality, cities, counties, and school districts have been overcharged for such items to the tune of millions of dollars.
An investigative report from the Institute for Local Self-Reliance (ILSR) demonstrates that Amazon Business has been building a monopoly on selling office products, cleaning supplies, and classroom materials. By claiming to offer better deals and quicker service than that of small and midsized businesses, Amazon Business has secured contracts with organizations that have long typically worked with local suppliers. School districts in particular account for 70 percent of local government spending with Amazon, creating unique consequences for officials, educators, and students.
Despite the tried-and-true nature of the traditional competitive bidding process, Amazon Business’s marketplace model has become an attractive option for local agencies. “They [Amazon] make this pitch that Amazon Business is a marketplace, and it therefore offers all the competition that you need. There are different sellers, and it’s like a market, and naturally that leads to the lowest price. And so you don’t have to worry,” says Stacy Mitchell, the co-executive director of ILSR. In reality, however, under the facade of a normal shopping interface, there is a lack of transparency, price-gouging, and an exploitation of the struggles of ill-equipped organizations, particularly school districts.
In the ILSR’s report, multiple instances were found in which separate school districts paid drastically different prices for the same product sold by Amazon. For example, in February of 2023, the Needham, Massachusetts, school district paid $9.08 each for packs of Amazon Basics tape dispensers, yet the city of Charleston, South Carolina, paid $17.99 for the very same product. On January 10th of that same year, Pittsburgh Schools bought two cases of Kleenex for $57.99 each, while Denver Schools paid only $36.91 for a single case. (Incidentally, all this is quite similar to the typical retail user’s experience with Amazon.)
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