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ILSR Report Convinces Local Government to Stop Buying From Amazon

Thursday, September 20, 2018   (0 Comments)
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ILSR Report Convinces Local Government to Stop Buying From Amazon

·         By  Maria Peroni  Bookselling this Week, September 19, 2018

Armed with information from a recent Institute for Local Self-Reliance (ILSR) report, bookseller Gayle Shanks of Changing Hands Bookstore, which has locations in Phoenix and Tempe, Arizona, was able to convince Tempe’s local government not to renew its purchasing contract from Amazon and to instead support independent businesses. Shanks spoke out on behalf local businesses after learning that the municipal government had spent more than $200,000 with Amazon in 2017.

Tempe is just one of more than 1,500 jurisdictions across the country that have signed onto a national contract with Amazon. The contract was awarded last year by U.S. Communities, an organization that negotiates joint purchasing agreements for its members, many of which are local governments. A report released in July by ILSR, titled “Amazon’s Next Frontier: Your City’s Purchasing,” demonstrates how the U.S. Communities contract benefits Amazon; takes business from local booksellers, office suppliers, and other independent retailers; and puts cities, counties, and school districts at risk. The report highlights how the Request for Proposals for the U.S. Communities contract was “tailor-made to favor a single company, Amazon,” and thus was not a truly competitive process.

Shanks believes that the issue of government procurement through Amazon is of utmost concern for booksellers: “I think every retailer, including booksellers, should be extremely concerned about this issue and should be up in arms fighting these contracts that Amazon is so quietly signing with cities all over the country. They are attempting to control all spending and buying and are adding to their monopolistic powers, which is never good for any democracy. I can’t imagine anything worth more time right now than pushing back against Amazon.”

Shanks, who serves on the Tempe team of the AZ Creative Communities Institute, a grants program for the arts, learned of Tempe’s contract with Amazon when a city official suggested compensating their artists with Amazon gift cards in lieu of cash. According to Shanks, “I was shocked that she would suggest this given that she loves our store, we had served on this project together for over a year, and that none of our other participants thought it upsetting that this was suggested. I realized I hadn’t done a good job of educating them, nor had our Local First organization, nor had they realized the insidious nature of Amazon’s creeping into the fabric of our city budget and administration.”

This experience prompted Shanks to contact the Tempe mayor and city council members. She learned about the city’s contract with Amazon through U.S. Communities. Shanks succeeded in having the issue added to the council’s agenda, and she testified at a city council meeting held on August 30. During her presentation, Shanks used information from the ILSR report to convince the council members to forego renewing the contract until a task force could be formed to evaluate whether buying through Amazon is beneficial.

The ILSR report shows that the U.S. Communities contract fails to secure the best price for local governments and forgoes standard pricing protections. ILSR argues that the contract forces independent businesses to sell through Amazon Marketplace if they wish to sell to public agencies. In this way, Amazon is not only a retailer selling goods to these agencies, but is also the platform through which its competitors have to go to reach their buyers — for which they charge what ILSR considers a private tax on their sales.

After reviewing the report, the council unanimously agreed not to renew the contract with Amazon via U.S. Communities.

Additionally, Shanks will now serve on the task force, which is scheduled to meet in two weeks.

Booksellers who would like to urge their governments to support independent businesses can use ILSR’s Amazon’s Next Frontier action sheet. The Local Policy Action Toolkit created by ILSR and Advocates for Independent Business, for which ABA is a member of the steering committee, offers concrete tips for independent business owners to both engage with their elected officials and advocate for policies that can support the local economy.