The ILSR – the Institure for Local Self Reliance – is a USA-based nonprofit organisation focused on building strong, community-driven local economies. Its mission is to help communities reduce dependence on big, centralised systems by promoting local ownership, sustainability, and decentralised economic structures.
The ILSR has conducted an investigation that reveals Amazon US has quietly become a major force in how cities, counties, and school districts purchase basic supplies in the United States — and that its tightening grip is driving up costs, eroding competition and harming local economies.
Drawing on purchasing records from 128 cities, counties, and school districts serving 51 million Americans, the report — Turning Public Money into Amazon’s Profits: The Hidden Cost of Ceding Government Procurement to a Monopoly Gatekeeper — exposes how Amazon has used its market power, alleged political influence and pricing algorithms to insert itself into public purchasing systems with little transparency or oversight.
The ISLR estimates that cities, counties, and school districts spent US$2.2 billion with Amazon in 2023 — a nearly fourfold increase since 2016. Through its Amazon Business platform, the company is often found to be the default source for office products, classroom materials, cleaning supplies, and other routine goods.
Through a close investigation of spending data, pricing, and contract terms, the ISLR found that Amazon has driven up costs for governments, eliminated transparency, and eroded competition by pushing out better-performing, more accountable independent suppliers. The ISLR feels that the disappearance of these small and mid-sized businesses weakens local economies and tax bases, leaving governments increasingly dependent on Amazon.
The ISLR asserts that Amazon US uses algorithm-driven pricing to continuously adjust what governments pay. The result is dramatic price variation: one city bought a 12-pack of Sharpie markers for $8.99, while a nearby school district paid $28.63 for the identical pack that same day. The ISLR’s data allegedly contains thousands of similar examples, with some agencies paying double or even triple what others paid for the same items. Across 2,500 frequently purchased products, the ISLR found that one school district could have saved 17% had it consistently received Amazon’s lowest prices.
In one example demonstrated in the report, a price comparison of 628 frequently purchased school supply items was used to compare Amazon US vs. an independent office supply dealer. The independent office supplies dealer, according to ISLR studies, beat Amazon on more than 68% of the lines. Overall, the independent’s prices were 4% lower.
Whilst these results apparently align with previous studies conducted by the ISLR, it is of major concern for MSPs and resellers in all markets where Amazon operates. It is assumed that governments and trade bodies are conducting similar studies in global marketplaces, and public purses and local economies are being protected.
