Amazon brings its heft to school procurement
Administrators, teachers and other school personnel have been ordering supplies from Amazon.com for years, but the e-tailing colossus has now jumped formally into the education procurement market.
And some in the procurement business see benefits.
“If they are bringing a new level of service and pricing and breadth of products, then the providers in that space today are going to have to get better,” says Kevin Juhring, executive director of U.S. Communities, a national purchasing co-op comprised of K12 schools, colleges and other public agencies. “They’re going to have to compete.”
Amazon Business launched last year and thousands educational institutions have created accounts, says the service’s vice president, Prentis Wilson.
“Serving educational institutions is different than serving consumers,” Wilson says. “Educational institutions need a broad range of supplies to operate and the right mix of procurement tools, analytical insights and engaged partnerships to do so efficiently and effectively.”
Set up as a single marketplace, the service can relieve K12 purchasers of having to manage hundreds of vendors who supply necessities like books, lab equipment, software and office products, Wilson says.
Amazon Business also integrates with 31 procurement systems and offers customer an analytics dashboard, with charts and graphs, that shows all the purchases an district’s employees have made, Wilson adds.
Amazon must assure district administrators that it can meet public procurement policies and security standards that vary from state to state, says Tom Fitzgerald, chief executive officer of E&I, a purchasing co-op whose owners include about 2,000 educational institutions.
And districts may still find lower prices by negotiating traditional contracts with big suppliers, says Jeremy Schwartz, director of cooperative contracts and procurement of the National Joint Powers Alliance, another public purchasing co-op.
“Amazon’s entrance into this space may have limitations with larger projects that have a higher-dollar spend,” he says.
Still, Amazon should help institutions save money on smaller-scale purchases. Beyond the multimillion-dollar contracts for furniture and computer equipment, Amazon may offer better deals on purchases in the tens-of-thousands-of-dollars range, says Stephen J. Wiehe, CEO of SciQuest, which makes procurement management software.
“I think Amazon is very good for the industry,” Wiehe says.
Amazon could also help smaller districts centralize and sharpen their spending, something many have sought to do since the public funding crunch brought on by the Great Recession, Fitzgerald says.
Unlike some colleges and universities, most K12 organizations haven’t had the money to bring corporate procurement specialists on staff to find the biggest savings.
And Amazon’s extensive analytics capabilities could provide schools with a deeper level of reporting, and thus higher transparency for the public, Fitzgerald says.
Procurement is only the latest big step Amazon has taken into education. Earlier this year, it launched an online clearinghouse for open-education resources.