It is well known that public sector customers have a requirement for procuring adhoc spend that is below the EU regulations threshold but which still needs to be managed and controlled. This tail spend, has been historically difficult to manage with a large number of suppliers and products with the associated administration costs which is why the Yorkshire Purchasing Authority (YPO) have done a deal to direct £400 million through an Amazon Business public sector deal.
The four year contract, worth up to £400m, will offer public sector customers buying from Amazon Business a compliant purchasing route for the first time. In addition, by accessing Amazon Business via YPO, which is one of the UK’s largest public sector buying organisations, customers will be earning income for the public purse with a percentage of each sale given back to the public sector.
The deal, first announced in July 2018, is thought to be the first major Amazon Business public sector deal in the UK. Amazon was the only supplier to express interest in the YPO contract although if you read through the original terms you might be forgiven for thinking that the terms were designed to make Amazon the only choice.
YPO customers will be directed to Amazon Business where they can set up their account and use a framework to buy products YPO currently doesn’t sell, all while being assured that these products have been compliantly sourced.
The framework launched on the 28th of May 2019 with a sales managed service for local authorities, multi-academy trusts and universities. A dedicated account manager will assist the customer from registration and set up before supporting the management of the account, as well as helping them assess and monitor their own level of compliance. A further self-service Amazon Business offering for schools will follow later in the year.
“We’re excited to launch a public sector route to Amazon Business for our customers. The demand for innovative ways to buy better is one of the highest priorities for public sector organisations and our new framework agreement represents a forward-thinking approach to public sector purchasing. It offers brand new benefits in a first for a public sector buying organisation in the UK.
Our recent customer survey showed that 80% of our customers already use Amazon so this will give them an opportunity to complete their list of requirements through YPO, without fragmenting their spend and threatening the ‘one-stop-shop’ proposition.”
– Simon Hill, managing director YPO
That 80% of YPO customers already use Amazon should be of great interest to merchants. This suggests that whilst a proportion of the £400 million already goes through Amazon, if you’ve been a beneficiary of theses sales you could lose them in the future if you don’t make your products available through Amazon Business. There will also be new sales from public sector businesses who previously used alternative purchasing sources who will now shop through the YPO Amazon Business public sector deal.
Amazon Business is free for merchants to sign up to and make their products available through, but does involve a offering a few additional services if you want to get the most out of it.