Amazon Tries Its Hand in School Procurement


Amazon Tries Its Hand in School Procurement

By Tina Nazerian     Feb 27, 2018

Amazon Tries Its Hand in School Procurement

Leigh Hansen says she got her school district an Amazon Business account in 2016 mostly for the curriculum department.

“Curriculum was buying used textbooks, and the easiest place to obtain them was Amazon,” says the director of purchasing and warehouse at William S. Hart Union High School District in Santa Clarita, California. “They way we were doing it before the approval process was taking too long, and sometimes the textbooks that they wanted to procure were no longer available.”

She thinks the Amazon Business account improves the overall efficiency at the school site.

“They’re not wasting time reviewing orders,” Hansen says.

Procurement is a complicated process that can vary by state and school district. Typically, items a school wants to purchase that cost more than a certain amount must go through a bidding process to ensure transparent use of public taxpayer money. For instance, the accounting and financial reporting manual for Arizona charter schools requires that schools get at least three oral price quotations for purchases that cost between $10,000 and $50,000. For purchases between $50,000 and $100,000, they must get least three written price quotes.

Daniel Smith, general manager of education at Amazon, calls the accounting and reporting required in the procurement process for K-12 and higher education a “patchwork of federal, state and local laws that are frankly very confusing,” even for professionals with years of experience.

“These laws change, and it’s very difficult to track them,” he says.

Smith says Amazon Business, which began in 2015, has worked with school districts “in nearly every state, large and small” and with different types of funding sources, to understand the tracking, reporting and accounting requirements. Amazon Business claims usage in over 98 percent of the K-12 school districts in the U.S., and about 95 percent of the 4,400 degree granting institutions in the U.S., including community colleges, two- and four-year degree granting institutions and graduate schools.

Smith adds that the company’s “goal is to help districts reduce the costs of procurement for smaller purchases where the procurement cost of a [purchase order] ranges from $42–$124, and it takes between 3–16 days just to process the requisition, excluding product fulfillment and shipping times.” That data cited comes from a report from the Council of Great City Schools, a group made up of 68 large U.S. urban school districts.

“We’ve built a suite of features that really begin to provide detail, analytics and reporting to finance and accounting professionals,” Smith says. “It also drives accountability up to the teaching and learning and superintendent levels in organizations, in K-12 organizations, and in higher education.” He adds that Amazon Business currently integrates with over 70 financial and other procurement systems.

Third-party sellers are on Amazon, and schools can use Amazon business to get their required number of quotes “without having to go through the call and fax and email and receive things in the U.S. mail,” Smith says.

Amazon Business furthered its efforts in school procurement with a public sector contract in 2017. The company and U.S. Communities, a cooperative purchasing program that allows school districts to use contracts arranged by lead public agencies (including other school districts), struck a deal in 2017. The lead agency was the Prince William County school district in Virginia. As Education Week reported, the deal meant that other districts, schools and other public education organizations would be “able to buy goods through Amazon Business to latch onto Prince William County’s deal, shopping for the best deal through the online forum.”

Amazon is far from the only company that sells education materials to schools. There’s Discount School Supply, which sells classroom materials for early childhood in bulk. Items for sale on their site include craft kits, STEM books, carpets and puzzles. Lakeshore sells educational items for early childhood and elementary levels, and even offers an “eProcurement website” schools can use for free.

Amazon Business was designed to preserve the Amazon user experience, Smith says, with custom pages that help educators find items recommended by their peers. He wants to continue adding more of those education-specific features and functionalities that help customers find new products.

Separate from Amazon Business, the company also develops and sells its own education software through a separate division, Amazon Education. Among these offerings are TenMarks, an online math and writing instructional program, and Inspire, a hub where educators can share digital materials. (More about Inspire in our coverage here.)

Hansen has found Amazon Business to be “very easy and intuitive to use,” but points out that users must remember not to confuse their business login with their personal login. Some of the school district’s Amazon Business account users had to call the company to get their two accounts “straightened out,” because they were using their district email as their personal account. Joining the district’s business account meant having to use their district email.

“Because they were using the Hart district email for both accounts, they couldn’t have a password for personal and business, so it kind of created a little bit of a problem for our users,” Hansen says. “But that wasn’t Amazon’s fault.”

Amazon’s Smith says there are over 40 different product categories that the average school district buys, including art supplies, trade books, STEM equipment and IT hardware. Amazon Business is also making headway in higher education, particularly in the category of lab and scientific equipment. He points to Johns Hopkins University, where lab managers purchase materials from Amazon.

Hansen says at her school district in Santa Clarita, teachers have been mostly buying books, alongside games for special education students, culinary items and technology cables. Each principal and their office managers, as well as the administrative assistants in the district office, have access to the business accounts. Teachers must submit their requisitions to their office manager, and the office manager submits them on their behalf.

So far, Hansen’s school district has spent $6000 on the Amazon Business account for the 2017–2018 school year. The business account is free, but Amazon’s free, two-day Prime shipping is not. Hansen opted out of purchasing it because it would have cost the district $1299 a year.

“I think Amazon is an efficient way to procure, [but] it’s not always the least expensive way,” Hansen says. “Some of the items that I’ve seen coming through Amazon, I can find better prices sometimes someplace else — and that’s only if I’m aware of the product that the end user’s trying to buy. I don’t go out and research everything that the users are trying to get.”

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