The first step in the RFP process is to determine the companies you want to consider as potential bidders for your distribution business. You could have, essentially, options: specialist companies that provide distribution companies to book publishers, and book publishers who handle distribution for other publishers.
Every of those 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 should be sent to a minimal of 4 bidders, and it is best to allow ample time (4 months, minimal) for the entire process from RFP creation to closing vendor selection.
Protect Your Data
Earlier than you trade any data, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA should not only embrace prohibitions against divulging confidential financial and operational info 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 enterprise model is a significant step, and till the choice is finalized and a transition plan confirmed, the details of the effort must be shared only on a need-to-know basis. Beyond the potential anxiety and disruption to your business, your negotiating leverage is diminished if your effort is affected by info leaks.
Part One: Your Needs and Expectations
An RFP ought to have two major sections. Section 1 should contain information about your current operations and your expectations for your enterprise over the three to 5 years following the transition to the third-party provider.
The latter is particularly important—especially should you see your group embracing the operational opportunities offered by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to say no to close-commodity ranges, printing technology improves and stock becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced operating prices for publishers.
Section 1 additionally ought to embrace, at minimum, quantitative particulars for your small business’ last full, fiscal yr, including:
Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in both dollars and units
Transaction details, including 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
Average number of books in storage
Specialised service necessities, together with kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for major processes similar 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’s a good idea to incorporate a multiyear view of the knowledge listed above that illustrates each historic trends 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 companies you’d like them to provide and, of course, the
The RFP should, at minimal, request the next:
• Distributor background, including history, ownership, group chart, shopper list and financial statements.
• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions together with workmovement diagrams. The operations should embrace order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.
• Service-level standards. Request that the distributor provide particulars of service-level standards (e.g., time in process) for critical business operations.
• Inventory administration, together with physical stock processes, shrink-
management procedures, back-order reporting and management, and audit controls.
• Digital services. A number of 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 services provide the smaller writer a remarkable opportunity and must be absolutely explored as part of the RFP process.
• Computer systems, together with an entire description of the hardware and enterprise software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, client data access and reporting capabilities.
• Contingency plans, together with
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 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 must be totally researched.
• Payment structure. Distributors typically will quote companies on a transaction basis or as a percentage of net sales. The publisher ought to specify the wantred pricing method, but for ease of comparing prospective costs with historical spending, the proportion of net sales technique is recommended. In addition to the bottom prices, the distributor should be asked to provide an in depth list of costs that are not included within the base payment, resembling extra returns fees, extra stock, custom-made reporting fees, etc.
• Transition costs. The move from your present distributor to your new provider is not going to be without costs. The distributor needs to be asked to provide an estimate of the transition bills that can be billed to you—if any—together with stock transfer, data upload and some other expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. You must have your authorized advisor evaluate the distributor’s pattern contract.
A Service Indicator
A caretotally crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you put money into it can be time well spent.
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