Step one within the RFP process is to establish the businesses you want to consider as potential bidders on your distribution business. You’ve got, essentially, two options: specialist companies that provide distribution providers 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 forged your net, the higher your options, as well as your understanding of the range of services available.
Regardless of the players you consider, your RFP must be despatched to a minimal of four bidders, and you must allow ample time (four months, minimal) for the whole process from RFP creation to last vendor selection.
Protect Your Data
Earlier than you trade any data, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA should not only include prohibitions against divulging confidential financial and operational data provided by either party, but 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 enterprise model is a significant step, and until the choice is finalized and a transition plan confirmed, the details of the trouble must be shared only on a need-to-know basis. Beyond the potential nervousness and disruption to your business, your negotiating leverage is diminished in case your effort is suffering from data leaks.
Part One: Your Needs and Expectations
An RFP ought to have two main sections. Part 1 should contain information about your present operations and your expectations for your online business over the three to five years following the transition to the third-party provider.
The latter is particularly important—particularly when you see your group embracing the operational opportunities presented by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to say no to close-commodity ranges, printing technology improves and inventory becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating prices for publishers.
Section 1 also ought to embrace, at minimal, quantitative details for your business’ final full, fiscal 12 months, including:
Number of active clients
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 invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles printed annually
Examination copy volume
Common number of books in storage
Specialized service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, including time-in-process necessities for major processes equivalent 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 can 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 idea to include a multiyear view of the data listed above that illustrates each historic trends and prospects for the future.
Part Two: Ask the Right Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions regarding their organizations, the companies you’d like them to provide and, in fact, the
The RFP ought to, at minimal, request the following:
• Distributor background, including history, ownership, organization chart, consumer list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, fulfillment and service processes, and written descriptions including workcirculate diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-degree standards. Request that the distributor provide details of service-degree standards (e.g., time in process) for critical business operations.
• Inventory administration, including physical stock processes, shrink-
control procedures, back-order reporting and administration, and audit controls.
• Digital services. A number of 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 must be totally explored as part of the RFP process.
• Computer systems, together with a complete description of the hardware and enterprise software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, consumer information access and reporting capabilities.
• Contingency plans, together with
disaster-recovery plans for the facility and business systems, and a readiness plan in the event of a pandemic flu outbreak. A stunning number of publishers have asked their suppliers to provide their business continuity plans for managing via a flu epidemic.
• Customer references. While references provided by the distributor will only be from glad prospects, they’re nonetheless valuable and should be completely researched.
• Fee structure. Distributors typically will quote services on a transaction basis or as a percentage of net sales. The publisher should specify the desirered pricing method, but for ease of evaluating prospective prices with historical spending, the share of net sales technique is recommended. In addition to the base costs, the distributor must be asked to provide an in depth list of prices that are not included within the base price, reminiscent of excess returns fees, excess inventory, personalized reporting charges, etc.
• Transition costs. The move from your current distributor to your new provider won’t be without costs. The distributor needs to be asked to provide an estimate of the transition expenses that will be billed to you—if any—including stock transfer, data upload and any other expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. You should have your legal advisor overview 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 put money into it might be time well spent.
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