The RFP Process Made Simple

Step one in the RFP process is to identify the businesses you want to consider as potential bidders in your distribution business. You’ve, essentially, two options: specialist corporations 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 companies available.

Regardless of the players you consider, your RFP ought to be despatched to a minimal of four bidders, and it’s best to permit ample time (4 months, minimum) for the whole process from RFP creation to ultimate vendor selection.

Protect Your Info
Earlier than you change any data, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embody prohibitions towards divulging confidential financial and operational data provided by either party, but should include 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 small print of the effort ought to be shared only on a necessity-to-know basis. Past the potential anxiousness and disruption to your corporation, your negotiating leverage is diminished in case your effort is affected by data leaks.

Part One: Your Needs and Expectations
An RFP should have main sections. Section 1 ought to include details about your present 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—particularly should you see your group embracing the operational opportunities introduced by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to near-commodity ranges, printing technology improves and stock turns into virtual, the calls for on distribution facilities will undergo dramatic change—all of which should translate to reduced operating prices for publishers.

Section 1 additionally ought to include, at minimum, quantitative particulars for your enterprise’ last full, fiscal 12 months, including:

Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each 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 revealed yearly
Examination copy quantity
Common number of books in storage
Specialized service necessities, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for major processes corresponding to income and complimentary-copy order success, returns processing, check-in and availability of incoming inventory, 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’s a good idea to incorporate a multiyear view of the knowledge listed above that illustrates both historic trends and prospects for the future.

Part Two: Ask the Right Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions regarding their organizations, the companies you’d like them to provide and, after all, the
associated costs.

The RFP should, at minimal, request the next:

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

• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions including workflow diagrams. The operations ought to embrace 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 details of service-degree standards (e.g., time in process) for critical business operations.

• Stock management, together with physical stock processes, shrink-
management procedures, back-order reporting and management, and audit controls.

• Digital services. A number of 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 services supply the smaller publisher a remarkable opportunity and needs to be absolutely explored as part of the RFP process.

• Computer systems, together with an entire 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
disaster-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.

• Buyer references. While references provided by the distributor will only be from happy customers, they’re nonetheless valuable and should be completely researched.

• Price structure. Distributors typically will quote providers on a transaction basis or as a percentage of net sales. The publisher ought to specify the favorred pricing technique, however for ease of evaluating prospective costs with historical spending, the proportion of net sales method is recommended. In addition to the bottom costs, the distributor needs to be asked to provide a detailed list of prices that are not included in the base payment, reminiscent of excess returns expenses, extra inventory, customized reporting charges, etc.

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

• Pattern contract. You must have your authorized advisor assessment the distributor’s pattern contract.

A Service Indicator
A caretotally crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you spend money on it will probably be time well spent.

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