Colorado's Local Governments and Schools Spent Over $7 Million on Amazon, Exposing Overcharging Issues

Colorado's Unprecedented Amazon Spending

In a recent analysis released by the Institute for Local Self-Reliance (ILSR), it has been revealed that Colorado's local governments and school districts allocated a staggering $7,177,022 for purchases through Amazon in the year 2023. This figure represents more than 150% of the inflation-adjusted amount of $2,678,614 spent back in 2016. The report serves not only as a financial analysis but also raises critical concerns about pricing practices employed by the retail giant, especially in public procurement processes.

The Impact of Dynamic Pricing

The report highlights how local governments and educational institutions are subject to Amazon's AI-powered dynamic pricing strategy. This approach implements constant fluctuations in prices based on vast data analytics. Such a model has detrimental effects on the operational budgets of municipalities and educational bodies.

An alarming instance noted in the report includes a purchase made by a City of Boulder employee, who paid $8.99 for a 12-pack of Sharpie fine-point black markers. Just a short distance away, an employee from Denver Public Schools purchased the same item for a staggering $28.63—almost three times the price.

Furthermore, price discrepancies were observed even within the same school district, where one entity paid $15.39 for a stapler, while another was charged $61.87 for the identical product just days later. This volatility raises questions regarding the fairness and transparency of pricing models used by Amazon.

A Costly Trade-Off

The findings suggest that local school districts could have saved approximately 17% of their total expenditures if Amazon's pricing practices had been different. This potential savings highlights the increasing concern that these public entities may not be getting the best value for taxpayer dollars.

The report draws extensively from purchasing records across 128 local government units and schools, all serving a population of over 51 million Americans. Titled