The RFP Process Made Simple

The first step within the RFP process is to establish the businesses you want to consider as potential bidders to your distribution business. You may have, essentially, options: specialist corporations that provide distribution providers 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 companies available.

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

Protect Your Info
Earlier than you trade any information, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA should not only embrace prohibitions against divulging confidential monetary and operational data provided by either party, however should comprise 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 decision is finalized and a transition plan confirmed, the small print of the hassle should be shared only on a need-to-know basis. Past the potential anxiousness and disruption to what you are promoting, your negotiating leverage is diminished if your effort is suffering from data leaks.

Part One: Your Needs and Expectations
An RFP ought to have main sections. Section 1 ought to include details about your present operations and your expectations for your corporation over the three to five years following the transition to the third-party provider.

The latter is particularly vital—especially in the event you see your group embracing the operational opportunities offered by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to decline to near-commodity levels, printing technology improves and stock turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced operating prices for publishers.

Part 1 additionally should embody, at minimum, quantitative details for your enterprise’ last full, fiscal 12 months, together with:

Number of active clients
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, together with number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles printed yearly
Examination copy quantity
Average number of books in storage
Specialised service necessities, together with kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, including time-in-process requirements for major processes similar to income 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 knowledge 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 information listed above that illustrates each historic traits and prospects for the future.

Part Two: Ask the Right Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the providers you would like them to provide and, in fact, the
associated costs.

The RFP should, at minimal, request the next:

• Distributor background, together with history, ownership, organization chart, consumer list and monetary statements.

• Operational descriptions. Request a list of critical warehouse, success and service processes, and written descriptions including workflow diagrams. The operations should include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.

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

• Stock management, including physical inventory processes, shrink-
management procedures, back-order reporting and administration, 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 companies provide the smaller publisher a remarkable opportunity and should be fully 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 enterprise systems, EDI/ONIX capabilities, shopper data access and reporting capabilities.

• Contingency plans, including
catastrophe-recovery plans for the facility and enterprise 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 enterprise continuity plans for managing by way of a flu epidemic.

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

• Payment structure. Distributors typically will quote services on a transaction basis or as a share of net sales. The writer should specify the favorred pricing method, however for ease of evaluating prospective costs with historical spending, the share of net sales methodology is recommended. In addition to the bottom prices, the distributor must be asked to provide a detailed list of costs that are not included in the base payment, corresponding to excess returns costs, 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 should be asked to provide an estimate of the transition bills that can be billed to you—if any—including stock transfer, data upload and another bills for which the distributor will anticipate to be reimbursed.

• Sample contract. You need to have your legal advisor review 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 spend money on it will likely be time well spent.

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