New York City Dept. of Education Partnering with Amazon.com to Create E-Book Storefront
From Capital New York:
The Department of Education is about to approve [official vote will take place in about a month] a $30 million contract with Amazon to create an e-book marketplace for New York City’s 1,800 public schools.
The Amazon deal will be one of the D.O.E.’s most expensive contracts and one of the city’s few significant deals with a leading technology company. The contract will also create the department’s first unified e-book marketplace.
Amazon will provide contracted content, such as widely used textbooks, along with non-contracted content, largely books and texts that individual schools select. Non-contracted content will be purchased directly from Amazon, and the D.O.E. is expecting both types of content to be provided at low prices via Amazon.
All the content can be used on a variety of devices, including smartphones, tablets, PCs and Macs.
Read the Complete Article
Primary Document: Request For Authorization to Contract With Amazon Digital Services to Provide an E-Book Storefront (5 pages; PDF, via Capital New York)
From Pages 3 and 4 of the Authorization Document
For cost/price analysis, we compared the pricing offered by Amazon with what was offered by Overdrive, the other viable proposer identified by the evaluation committee.
When DOE provided the electronic content, Overdrive proposed an 8.5% mark-up while Amazon proposed a 15% mark up, with up to a 5% annual rebate should sales volumes increase from year to year.
When the vendor provided the electronic content, Overdrive offered a 35.5% net discount (42.75% minus a 7.25% mark-up) from list price, while Amazon advised that its discount will vary depending upon the wholesale price it negotiates with each publisher, but would always be no higher than its website price (plus a mark-up for electronic content fulfillment which was not defined and covers expenses such as data conversion, storage, maintenance, uploading, distribution and customer service.) We took a sample of 162 publications for which we could locate list prices and, from that subset, we applied Overdrive’s net discount and Amazon’s price from their website. In total, Amazon’s pricing was 22.8% below Overdrive’s. Even after accounting for Amazon’s content fulfillment fee, which would be less than the 15% it will charge when it provides content (as indicated above), we are confident that Amazon’s pricing for vendor provided content falls below Overdrive’s.
As the evaluation committee’s final assessment of the two proposals favored Amazon by a significant margin, the analysis above leads the DOE to conclude that Amazon’s pricing is fair and reasonable.
About Gary Price
Gary Price (email@example.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. He earned his MLIS degree from Wayne State University in Detroit. Price has won several awards including the SLA Innovations in Technology Award and Alumnus of the Year from the Wayne St. University Library and Information Science Program. From 2006-2009 he was Director of Online Information Services at Ask.com. Gary is also the co-founder of infoDJ an innovation research consultancy supporting corporate product and business model teams with just-in-time fact and insight finding.