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The RFP Process Made Simple

Step one in the RFP process is to determine the businesses you wish to consider as potential bidders to your distribution business. You’ve got, essentially, options: specialist corporations that provide distribution companies to book publishers, and book publishers who handle distribution for other publishers.

Each of those 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 services available.

Regardless of the players you consider, your RFP ought to be despatched to a minimum of 4 bidders, and it is best to enable ample time (4 months, minimum) for your entire process from RFP creation to final vendor selection.

Protect Your Info

Before you exchange any info, 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 information provided by either party, but should include 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 hassle needs to be shared only on a need-to-know basis. Beyond the potential nervousness and disruption to your small business, your negotiating leverage is diminished in case your effort is suffering from information leaks.

Part One: Your Wants and Expectations

An RFP should have main sections. Section 1 should contain details about your current 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 necessary—particularly in case you 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 near-commodity levels, printing technology improves and stock becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working costs for publishers.

Section 1 additionally should embrace, at minimal, quantitative details for your enterprise’ 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 bill

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, international shipments, sticker application, re-jacketing, etc.

Publisher service expectations, including time-in-process requirements for major processes corresponding to revenue and complimentary-copy order achievement, returns processing, check-in and availability of incoming inventory, etc.

Be Accurate and In-depth

The quality and quantity of the data 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 include a multiyear view of the information listed above that illustrates both historic developments and prospects for the future.

Part Two: Ask the Right 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, in fact, the

related costs.

The RFP ought to, at minimum, request the next:

• Distributor background, including history, ownership, group chart, consumer list and monetary statements.

• Operational descriptions. Request a list of critical warehouse, fulfillment and service processes, and written descriptions together with workstream diagrams. The operations ought to 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 particulars of service-level standards (e.g., time in process) for critical enterprise operations.

• Stock administration, including 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 administration service providers and e-book distributors to supply a broader range of services. These companies provide the smaller publisher a remarkable opportunity and ought to be totally 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 information access and reporting capabilities.

• Contingency plans, including

catastrophe-recovery plans for the facility and business 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 via a flu epidemic.

• Customer references. While references provided by the distributor will only be from happy prospects, they are nonetheless valuable and ought to be completely researched.

• Fee structure. Distributors typically will quote providers on a transaction basis or as a percentage of net sales. The publisher ought to specify the wantred pricing technique, however for ease of comparing prospective prices with historical spending, the proportion of net sales methodology is recommended. In addition to the bottom prices, the distributor ought to be asked to provide an in depth list of prices that are not included within the base price, such as excess returns prices, excess inventory, customized reporting charges, etc.

• Transition costs. The move from your current distributor to your new provider won’t be without costs. The distributor ought to be asked to provide an estimate of the transition expenses that might be billed to you—if any—including inventory transfer, data upload and another bills for which the distributor will expect to be reimbursed.

• Pattern contract. You must have your legal advisor evaluation the distributor’s pattern 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 shall be time well spent.

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