The RFP Process Made Simple

Step one in the RFP process is to determine the companies you wish to consider as potential bidders for your distribution business. You will have, essentially, two options: specialist corporations that provide distribution services to book publishers, and book publishers who handle distribution for different publishers.

Each of these options has its pluses and minuses. Consider each—the broader you solid your net, the higher your options, as well as your understanding of the range of providers available.

Regardless of the players you consider, your RFP must be sent to a minimal of 4 bidders, and it is best to allow ample time (four months, minimum) for your complete process from RFP creation to ultimate vendor selection.

Protect Your Info
Before you alternate any info, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA mustn’t only embrace prohibitions in opposition to 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 effort needs to be shared only on a need-to-know basis. Beyond the potential anxiety and disruption to your enterprise, your negotiating leverage is diminished in case your effort is affected by data leaks.

Part One: Your Needs and Expectations
An RFP should have two main sections. Section 1 ought to contain 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 essential—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 decline to close-commodity ranges, printing technology improves and inventory becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating prices for publishers.

Section 1 additionally should include, at minimum, quantitative details for what you are promoting’ last full, fiscal 12 months, together with:

Number of active customers
Number of invoices and credit memos issued yearly
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 revealed yearly
Examination copy quantity
Average number of books in storage
Specialized service requirements, together with kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process necessities for main processes akin 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 knowledge you provide may 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 suggestion to incorporate a multiyear view of the information listed above that illustrates both historic tendencies and prospects for the future.

Part Two: Ask the Proper Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the providers you’d like them to provide and, in fact, the
related costs.

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

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

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

• Inventory administration, including physical stock 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 administration service providers and e-book distributors to supply a broader range of services. These companies supply the smaller publisher a remarkable opportunity and must be fully 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 business systems, EDI/ONIX capabilities, consumer info access and reporting capabilities.

• Contingency plans, including
disaster-recovery plans for the facility and business systems, and a readiness plan in the event of a pandemic flu outbreak. A surprising number of publishers have asked their suppliers to provide their business continuity plans for managing by a flu epidemic.

• Buyer references. While references provided by the distributor will only be from satisfied prospects, they are nonetheless valuable and ought to be thoroughly researched.

• Price structure. Distributors typically will quote companies on a transaction foundation or as a share of net sales. The writer ought to specify the preferred pricing methodology, but for ease of evaluating prospective prices with historical spending, the percentage 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 aren’t included in the base price, corresponding to excess returns costs, excess inventory, custom-made 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—together with inventory switch, data upload and some other bills for which the distributor will expect to be reimbursed.

• Sample contract. You should have your legal advisor review the distributor’s sample contract.

A Service Indicator
A caretotally crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you invest in it will be time well spent.

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