Step one within the RFP process is to establish the businesses you want to consider as potential bidders in your distribution business. You might have, essentially, two options: specialist companies that provide distribution companies to book publishers, and book publishers who deal with distribution for different publishers.
Every of these options has its pluses and minuses. Consider each—the broader you cast your net, the better your options, as well as your understanding of the range of providers available.
Regardless of the players you consider, your RFP needs to be despatched to a minimal of 4 bidders, and you must permit ample time (four months, minimal) for the entire process from RFP creation to last vendor selection.
Protect Your Information
Earlier than you alternate any information, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embrace prohibitions against divulging confidential financial and operational information provided by either party, but should include a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the publisher’s organization. Moving to a third-party distribution enterprise model is a significant step, and till the decision is finalized and a transition plan confirmed, the main points of the trouble ought to be shared only on a necessity-to-know basis. Beyond the potential anxiety and disruption to your business, your negotiating leverage is diminished in case your effort is plagued by info leaks.
Part One: Your Needs and Expectations
An RFP should have two main sections. Section 1 should comprise information about your existing operations and your expectations for your business over the three to 5 years following the transition to the third-party provider.
The latter is particularly necessary—especially for those who see your organization embracing the operational opportunities presented by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to near-commodity levels, printing technology improves and inventory becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating costs for publishers.
Part 1 additionally should embrace, at minimal, quantitative particulars for your enterprise’ last full, fiscal yr, including:
Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, including number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles revealed yearly
Examination copy quantity
Common number of books in storage
Specialised service requirements, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process necessities for major processes reminiscent of revenue and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the information 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’s a good idea to incorporate a multiyear view of the data listed above that illustrates both historic trends and prospects for the future.
Part Two: Ask the Proper Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions relating to their organizations, the services you’d like them to provide and, after all, the
The RFP should, at minimal, request the next:
• Distributor background, including history, ownership, group chart, consumer list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, success and service processes, and written descriptions together with workstream diagrams. The operations should embody order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-stage standards. Request that the distributor provide details of service-level standards (e.g., time in process) for critical enterprise operations.
• Inventory administration, together with physical stock 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 management service providers and e-book distributors to supply a broader range of services. These providers supply the smaller publisher a remarkable opportunity and ought to be fully explored as part of the RFP process.
• Computer systems, including a complete description of the hardware and business software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, client information access and reporting capabilities.
• Contingency plans, including
catastrophe-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 through a flu epidemic.
• Buyer references. While references provided by the distributor will only be from glad clients, they’re nonetheless valuable and must be totally researched.
• Charge structure. Distributors typically will quote services on a transaction foundation or as a proportion of net sales. The writer should specify the desirered pricing method, however for ease of comparing prospective prices with historical spending, the proportion of net sales technique is recommended. In addition to the bottom costs, the distributor must be asked to provide a detailed list of costs that are not included in the base payment, such as excess returns fees, excess stock, customized reporting fees, etc.
• Transition costs. The move out of your existing 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 probably be billed to you—if any—including inventory switch, data upload and another expenses for which the distributor will expect to be reimbursed.
• Sample contract. It is best to have your authorized advisor evaluation the distributor’s sample contract.
A Service Indicator
A carefully crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you spend money on it will probably be time well spent.
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