The RFP Process Made Simple

Step one within the RFP process is to determine the businesses you wish to consider as potential bidders to your distribution business. You might have, essentially, options: specialist companies 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 cast your net, the higher your options, as well as your understanding of the range of companies available.

Regardless of the players you consider, your RFP should be despatched to a minimum of four bidders, and you must allow ample time (four months, minimum) for your entire process from RFP creation to ultimate vendor selection.

Protect Your Information
Before you alternate any information, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA should not only embrace prohibitions in opposition to divulging confidential financial and operational info provided by either party, but ought to include 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 till the choice is finalized and a transition plan confirmed, the details of the trouble needs to be shared only on a necessity-to-know basis. Past the potential anxiety and disruption to your small business, your negotiating leverage is diminished if your effort is stricken by information leaks.

Part One: Your Wants and Expectations
An RFP ought to have major sections. Section 1 ought to contain information about your present 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 vital—especially if you see your organization embracing the operational opportunities introduced by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to say no to near-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.

Part 1 also ought to include, at minimal, quantitative details for your corporation’ final full, fiscal year, including:

Number of active prospects
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction details, together with number of units per invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles printed annually
Examination copy quantity
Average number of books in storage
Specialized service requirements, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Writer service expectations, including time-in-process requirements for main processes comparable 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 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 data listed above that illustrates each historic developments and prospects for the future.

Part Two: Ask the Proper Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the services you would like them to provide and, of course, the
related costs.

The RFP should, at minimal, request the following:

• Distributor background, together with history, ownership, group chart, client list and financial statements.

• Operational descriptions. Request a list of critical warehouse, fulfillment and repair processes, and written descriptions including workmovement diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.

• Service-stage standards. Request that the distributor provide particulars of service-level standards (e.g., time in process) for critical business operations.

• Inventory administration, including physical inventory processes, shrink-
control procedures, back-order reporting and management, 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 providers offer the smaller writer a remarkable opportunity and must be totally 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, consumer data access and reporting capabilities.

• Contingency plans, together with
disaster-recovery plans for the facility and business systems, and a readiness plan in 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 satisfied prospects, they are nonetheless valuable and needs to be completely researched.

• Payment structure. Distributors typically will quote companies on a transaction foundation or as a percentage of net sales. The publisher should specify the choosered pricing method, but for ease of evaluating prospective prices with historical spending, the percentage of net sales technique is recommended. In addition to the base costs, the distributor ought to be asked to provide an in depth list of costs that are not included in the base payment, akin to extra returns fees, extra inventory, customized reporting fees, etc.

• Transition costs. The move out of your existing 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 might be billed to you—if any—including stock switch, data upload and another bills for which the distributor will count on to be reimbursed.

• Pattern contract. It is best to have your legal advisor overview the distributor’s pattern contract.

A Service Indicator
A caretotally crafted RFP is essential to successfully evaluating the potential worth of third-party distribution. The time you put money into it will likely be time well spent.

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