The first step in 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 corporations that provide distribution providers to book publishers, and book publishers who handle distribution for other publishers.
Every of these options has its pluses and minuses. Consider each—the broader you solid 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 should be sent to a minimal of 4 bidders, and you need to allow ample time (4 months, minimal) for all the process from RFP creation to final vendor selection.
Protect Your Data
Before you exchange any data, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions in opposition to divulging confidential monetary and operational data provided by either party, but ought to comprise a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the publisher’s organization. Moving to a third-party distribution business model is a significant step, and until the decision is finalized and a transition plan confirmed, the small print of the effort ought to be shared only on a need-to-know basis. Beyond the potential anxiety and disruption to your small business, your negotiating leverage is diminished if your effort is affected by information leaks.
Part One: Your Needs and Expectations
An RFP should have major sections. Part 1 should comprise information about your existing operations and your expectations for what you are promoting over the three to five years following the transition to the third-party provider.
The latter is particularly important—particularly for those who see your organization embracing the operational opportunities offered by print-on-demand (POD) and short-run digital printing. As POD pricing continues to say no to close-commodity levels, printing technology improves and stock turns into virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating costs for publishers.
Section 1 additionally should include, at minimal, quantitative details for your business’ last full, fiscal 12 months, together with:
Number of active clients
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in each 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 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 main processes resembling revenue and complimentary-copy order success, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the knowledge you provide could 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 incorporate a multiyear view of the information listed above that illustrates both historic tendencies and prospects for the future.
Part Two: Ask the Right Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the services you’d like them to provide and, of course, the
The RFP ought to, at minimal, request the next:
• Distributor background, together with history, ownership, group chart, shopper list and financial statements.
• Operational descriptions. Request a list of critical warehouse, fulfillment and service processes, and written descriptions including workcirculate diagrams. The operations should include 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 details of service-level standards (e.g., time in process) for critical business operations.
• Stock administration, including physical stock processes, shrink-
control procedures, back-order reporting and administration, and audit controls.
• Digital services. Several main 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 absolutely explored as part of the RFP process.
• Computer systems, including 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 info access and reporting capabilities.
• Contingency plans, together with
catastrophe-recovery plans for the facility and business systems, and a readiness plan within the event of a pandemic flu outbreak. A stunning 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 customers, they are nonetheless valuable and must be thoroughly researched.
• Payment structure. Distributors typically will quote services on a transaction foundation or as a share of net sales. The writer should specify the preferred pricing methodology, however for ease of comparing prospective prices with historical spending, the percentage of net sales methodology is recommended. In addition to the base costs, the distributor needs to be asked to provide a detailed list of prices that aren’t included within the base payment, comparable to extra returns fees, extra stock, personalized reporting charges, etc.
• Transition costs. The move from 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 bills that will probably be billed to you—if any—including stock transfer, data upload and any other expenses for which the distributor will expect to be reimbursed.
• Sample contract. You need to have your authorized advisor evaluate the distributor’s sample contract.
A Service Indicator
A careabsolutely crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you invest in it might be time well spent.
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