Step one in the RFP process is to determine the companies you want to consider as potential bidders for your distribution business. You’ve, essentially, options: specialist corporations that provide distribution providers to book publishers, and book publishers who handle distribution for different publishers.
Each of those options has its pluses and minuses. Consider both—the broader you forged 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 sent to a minimal of four bidders, and it’s best to enable ample time (4 months, minimal) for the whole process from RFP creation to closing vendor selection.
Protect Your Information
Earlier than you alternate any info, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions in opposition to divulging confidential monetary and operational info provided by either party, however should comprise 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 until the choice is finalized and a transition plan confirmed, the main points of the hassle should be shared only on a necessity-to-know basis. Beyond the potential anxiety and disruption to your enterprise, your negotiating leverage is diminished if your effort is tormented by data leaks.
Part One: Your Needs and Expectations
An RFP ought to have main sections. Part 1 should include details about your existing operations and your expectations for your enterprise over the three to five years following the transition to the third-party provider.
The latter is particularly essential—especially if you happen to see your group embracing the operational opportunities introduced by print-on-demand (POD) and short-run digital printing. As POD pricing continues to decline to near-commodity levels, printing technology improves and inventory turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced operating costs for publishers.
Section 1 also should embody, at minimum, quantitative particulars for your corporation’ final full, fiscal year, 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 invoice
Number of titles in active backlist
Number of new titles published annually
Examination copy volume
Common number of books in storage
Specialized service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process requirements for major processes similar to revenue and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming stock, etc.
Be Accurate and In-depth
The quality and quantity of the data 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 idea to incorporate a multiyear view of the knowledge listed above that illustrates each historic developments and prospects for the future.
Part Two: Ask the Right Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions regarding their organizations, the services you would like them to provide and, of course, the
The RFP should, at minimum, request the following:
• Distributor background, together with history, ownership, organization chart, client list and financial statements.
• Operational descriptions. Request a list of critical warehouse, fulfillment and service processes, and written descriptions including workstream diagrams. The operations should embrace order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.
• Service-stage standards. Request that the distributor provide particulars of service-degree standards (e.g., time in process) for critical business operations.
• Stock management, including physical inventory processes, shrink-
management 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 offer a broader range of services. These services supply the smaller publisher a remarkable opportunity and should 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, shopper data 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 shocking number of publishers have asked their suppliers to provide their enterprise continuity plans for managing by a flu epidemic.
• Buyer references. While references provided by the distributor will only be from glad clients, they’re nonetheless valuable and ought to be totally researched.
• Price structure. Distributors typically will quote providers on a transaction basis or as a proportion of net sales. The writer ought to specify the favorred pricing methodology, however for ease of evaluating prospective prices with historical spending, the share of net sales technique is recommended. In addition to the base prices, the distributor ought to be asked to provide a detailed list of costs that aren’t included within the base charge, reminiscent of extra returns prices, extra inventory, personalized reporting fees, etc.
• Transition costs. The move out of your present distributor to your new provider won’t be without costs. The distributor needs to be asked to provide an estimate of the transition bills that will be billed to you—if any—including inventory switch, data upload and some other expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. It’s best to have your authorized advisor evaluate the distributor’s pattern contract.
A Service Indicator
A carefully crafted RFP is essential to successfully evaluating the potential worth of third-party distribution. The time you put money into it will be time well spent.
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