The first step within the RFP process is to identify the businesses you want to consider as potential bidders for your distribution business. You’ve, essentially, two options: specialist firms that provide distribution services to book publishers, and book publishers who deal with distribution for different publishers.
Every of these options has its pluses and minuses. Consider both—the broader you solid 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 ought to be despatched to a minimum of four bidders, and you should enable ample time (4 months, minimum) for the entire process from RFP creation to closing vendor selection.
Protect Your Info
Before you trade any information, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA mustn’t only include prohibitions towards divulging confidential monetary and operational info provided by either party, but should contain 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 till the decision is finalized and a transition plan confirmed, the main points of the trouble needs to be shared only on a necessity-to-know basis. Past the potential anxiety and disruption to your corporation, your negotiating leverage is diminished in case your effort is plagued by data leaks.
Part One: Your Wants and Expectations
An RFP should have major sections. Section 1 ought to comprise information about your current operations and your expectations for your business over the three to five years following the transition to the third-party provider.
The latter is particularly essential—especially should you 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 working prices for publishers.
Section 1 also ought to embody, at minimum, quantitative details for your small business’ last 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, including number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles published yearly
Examination copy volume
Common number of books in storage
Specialized service requirements, together with kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process necessities for main processes akin to income 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 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 is a good idea to incorporate a multiyear view of the data listed above that illustrates each 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 companies you’ll like them to provide and, after all, the
The RFP ought to, at minimum, request the following:
• Distributor background, including history, ownership, organization chart, consumer list and financial statements.
• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions together with workcirculation diagrams. The operations ought to embrace 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-stage standards (e.g., time in process) for critical enterprise operations.
• Inventory management, together with physical inventory processes, shrink-
management procedures, back-order reporting and management, 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 offer a broader range of services. These providers supply the smaller writer a remarkable opportunity and must be absolutely explored as part of the RFP process.
• Computer systems, together with 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 info access and reporting capabilities.
• Contingency plans, together with
catastrophe-recovery plans for the facility and enterprise systems, and a readiness plan within the occasion 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 clients, they’re nonetheless valuable and must be totally researched.
• Charge structure. Distributors typically will quote providers on a transaction foundation or as a percentage of net sales. The publisher should specify the desirered pricing technique, but for ease of comparing prospective prices with historical spending, the percentage of net sales methodology is recommended. In addition to the bottom prices, the distributor must be asked to provide a detailed list of prices that are not included in the base charge, such as extra returns expenses, extra stock, custom-made reporting fees, etc.
• Transition costs. The move out of your present distributor to your new provider will not be without costs. The distributor must be asked to provide an estimate of the transition expenses that can be billed to you—if any—including stock switch, data upload and some other bills for which the distributor will expect to be reimbursed.
• Sample contract. You should have your authorized advisor evaluate the distributor’s sample contract.
A Service Indicator
A carefully crafted RFP is essential to successfully evaluating the potential worth of third-party distribution. The time you spend money on it will likely be time well spent.
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