A new report analyzing local and state purchasing trends found that Washington state governments are spending more money on Amazon than any other state in the study, raising questions about transparency, pricing, and the impact on local businesses.
The Institute for Local Self-Reliance (ILSR) report reviewed procurement data from 128 local governments and 122 state agencies.
It found that Amazon has rapidly expanded its hold on public-sector purchasing through its Amazon Business platform, especially in Washington.
Researchers reported that the Washington Department of Social and Health Services spent $3.8 million on Amazon in 2023, the highest total of any state agency surveyed.
Washington’s position at the top reflects a broader trend.
The report says the state is something of a “bellwether,” noting that King County was one of the earliest adopters of Amazon’s government purchasing system.
Locally, city and county spending also surged.
The report shows Pierce County purchased more than $2.3 million worth of goods on Amazon in 2023, while Clark County spent nearly $690,000.
The City of Anacortes recorded more than $167,000 in purchases, a level researchers said made it one of the higher per-capita spenders in their sample.
The report found that Amazon’s algorithmic “dynamic pricing” often resulted in schools, cities, and counties paying dramatically different amounts for the same items—even on the same day.
Some governments paid double or triple what others paid for identical supplies, and the analysis warned this could inflate costs for Washington taxpayers.
The report includes several examples of how Amazon’s dynamic pricing leads governments to pay widely different amounts for the same products.
In one case, a Colorado school district paid three times more than a neighboring city for the same 12-pack of Sharpie markers purchased on the same day.
Other governments saw similar swings: two Iowa City school employees bought identical snack cartons at prices that differed by nearly $8, and a Virginia school district was charged two different prices for the same case of copy paper within the same week.
Researchers also noted that Amazon charged Clark County, Washington nearly $24,000 more for a bulk order of computer monitors than it would have charged on a different day.
An Amazon spokesperson told KIRO 7 News: “This flawed and misleading report based on data from 2023 misrepresents the facts and does not reflect the significant cost savings Amazon Business provides customers by offering everyday low prices that meet or beat other online providers and powerful tools to lower their spend. Pricing research is notoriously difficult to conduct accurately and typically lacks reliable methodology, including cherry-picked product selections, mismatched product comparisons, and comparing in-stock items with products out-of-stock at competitors. Amazon Business offers customers price ceilings that ensure they don’t pay above an agreed price, while automatically capturing savings when prices are lower.”
Researchers also highlighted a broader accountability issue: many states, including Washington, struggle to track what their agencies are buying through Amazon.
According to the report, several agencies were unaware of whether a statewide Amazon contract existed, and purchasing information was often incomplete or scattered across databases.
The report says this lack of transparency could make it harder for elected officials, journalists, and the public to evaluate whether Amazon purchases follow procurement rules designed to control costs.
Although Amazon markets its platform as a tool for supporting small and local sellers, the report found that almost none of the public dollars spent on Amazon in many jurisdictions actually reach nearby businesses.
Amazon added: “Amazon Business makes it easy for customers to search for and purchase supplies from certified local businesses and diverse sellers in their area to drive local growth, foster connections, and create a positive impact in the community.”
Nationally, high seller fees and a lack of price stability make it difficult for independent suppliers to compete.
Washington’s strong participation in Amazon’s procurement ecosystem, the report warns, may accelerate the decline of local suppliers that traditionally provided schools and government offices with competitive pricing, next-day delivery, and customer service.
Because Amazon’s foothold in state-level purchasing is still developing, the report says states like Washington have a window to set guardrails.
Recommendations include banning dynamic pricing in public contracts, prioritizing local suppliers, strengthening purchasing data transparency, and developing or improving publicly run online marketplaces.
Amazon disputed the report’s conclusions, saying the analysis overlooks how short-term discounts—such as those offered during events like Amazon Business Prime Day—can temporarily lower prices and are not meant to represent year-round pricing.
The company pointed to a new Profitero study finding Amazon offered the lowest online prices among 23 major U.S. retailers for the ninth straight year in 2025, with prices averaging 14% below competitors.
Amazon also said its Business platform provides “everyday low prices,” price ceilings that prevent buyers from paying above negotiated maximums, and tools that allow agencies to highlight and prioritize local sellers.
The company noted that use of its local-seller policies has increased 57% since late 2023 and said many public-sector customers report positive experiences, citing examples such as the Green Bay Area Public School District.
Amazon added that its seller fees are transparent, often as low as 5% depending on the product category, and that it routinely compares its prices to major retailers to ensure competitive offers across its marketplace.