The RFP Process Made Simple

The first step in the RFP process is to determine the companies you wish to consider as potential bidders in your distribution business. You’ve, essentially, options: specialist corporations that provide distribution services to book publishers, and book publishers who deal with distribution for other publishers.

Each of these options has its pluses and minuses. Consider each—the broader you forged your net, the higher your options, as well as your understanding of the range of companies available.

Regardless of the players you consider, your RFP should be despatched to a minimum of four bidders, and you should allow ample time (four months, minimum) for all the process from RFP creation to final vendor selection.

Protect Your Data

Before you alternate any information, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only include prohibitions towards divulging confidential monetary and operational info provided by either party, however should contain a clause clearly prohibiting the dialogue of the RFP with unauthorized parties within the writer’s organization. Moving to a third-party distribution business model is a significant step, and till the choice is finalized and a transition plan confirmed, the details of the trouble should be shared only on a necessity-to-know basis. Past the potential anxiousness and disruption to your business, your negotiating leverage is diminished if your effort is plagued by info leaks.

Part One: Your Needs and Expectations

An RFP should have major sections. Part 1 ought to include details about your current operations and your expectations for your enterprise over the three to 5 years following the transition to the third-party provider.

The latter is particularly essential—particularly for those who see your organization embracing the operational opportunities presented by print-on-demand (POD) and short-run digital printing. As POD pricing continues to decline to near-commodity ranges, printing technology improves and stock turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating costs for publishers.

Section 1 additionally should embrace, at minimal, quantitative particulars for your corporation’ final full, fiscal yr, including:

Number of active customers

Number of invoices and credit memos issued yearly

Calendarized gross sales and returns—in both dollars and units

Transaction particulars, together with number of units per bill and number of lines per bill

Number of titles in active backlist

Number of new titles published annually

Examination copy volume

Average number of books in storage

Specialised service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.

Publisher service expectations, including time-in-process requirements for main processes akin to revenue and complimentary-copy order success, returns processing, check-in and availability of incoming stock, etc.

Be Accurate and In-depth

The quality and quantity of the data you provide will have a direct bearing on the accuracy of the bid and the quality of the working relationship between you and your distribution partner. It is a good suggestion to include a multiyear view of the knowledge listed above that illustrates both historic trends and prospects for the future.

Part Two: Ask the Right Questions

Section 2 of the RFP provides the prospective distribution partners with detailed questions relating to their organizations, the providers you’d like them to provide and, after all, the

related costs.

The RFP ought to, at minimal, request the next:

• Distributor background, together with history, ownership, group chart, shopper list and monetary statements.

• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions including workcirculation diagrams. The operations ought to embody order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.

• Service-degree standards. Request that the distributor provide particulars of service-level standards (e.g., time in process) for critical business operations.

• Inventory management, including physical inventory processes, shrink-

control procedures, back-order reporting and administration, and audit controls.

• Digital services. Several major distributors have established strategic alliances with POD specialists, digital asset administration service providers and e-book distributors to supply a broader range of services. These companies supply the smaller publisher a remarkable opportunity and needs to be fully explored as part of the RFP process.

• Computer systems, together with an entire description of the hardware and enterprise software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, shopper information access and reporting capabilities.

• Contingency plans, including

disaster-recovery plans for the facility and enterprise systems, and a readiness plan in the occasion of a pandemic flu outbreak. A surprising number of publishers have asked their suppliers to provide their business continuity plans for managing via a flu epidemic.

• Buyer references. While references provided by the distributor will only be from satisfied prospects, they are nonetheless valuable and must be completely researched.

• Fee structure. Distributors typically will quote companies on a transaction basis or as a percentage of net sales. The publisher should specify the favorred pricing methodology, however for ease of evaluating prospective prices with historical spending, the proportion of net sales method is recommended. In addition to the base costs, the distributor needs to be asked to provide a detailed list of prices that are not included within the base payment, equivalent to extra returns expenses, excess stock, personalized reporting fees, etc.

• Transition costs. The move out of your present distributor to your new provider is not going to be without costs. The distributor ought to be asked to provide an estimate of the transition expenses that will likely be billed to you—if any—together with stock transfer, data upload and any other bills for which the distributor will count on to be reimbursed.

• Pattern contract. You must have your legal advisor overview the distributor’s pattern contract.

A Service Indicator

A caretotally crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you invest in it will probably be time well spent.

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