The RFP Process Made Simple

Step one in the RFP process is to establish the companies you wish to consider as potential bidders in your distribution business. You might have, essentially, two options: specialist corporations that provide distribution companies to book publishers, and book publishers who deal with distribution for other publishers.

Each of these options has its pluses and minuses. Consider both—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 must be sent to a minimal of 4 bidders, and you should enable ample time (4 months, minimal) for the entire process from RFP creation to ultimate vendor selection.

Protect Your Data
Earlier than you alternate any info, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only include prohibitions towards divulging confidential financial and operational information provided by either party, however 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 business model is a significant step, and till the decision is finalized and a transition plan confirmed, the main points of the trouble should be shared only on a necessity-to-know basis. Beyond the potential anxiousness and disruption to your business, your negotiating leverage is diminished in case your effort is affected by information leaks.

Part One: Your Needs and Expectations
An RFP ought to have main sections. Section 1 should include details about your current 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 essential—especially in the event you see your organization embracing the operational opportunities introduced by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to close-commodity ranges, printing technology improves and inventory becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working prices for publishers.

Part 1 additionally should embody, at minimum, quantitative particulars for your online business’ final full, fiscal 12 months, together with:

Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in both dollars and units
Transaction particulars, together with number of units per invoice and number of lines per bill
Number of titles in active backlist
Number of new titles published yearly
Examination copy quantity
Common number of books in storage
Specialised service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for major processes akin to income and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the information 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 is a good idea to include a multiyear view of the knowledge listed above that illustrates both historic traits and prospects for the future.

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

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

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

• Operational descriptions. Request a list of critical warehouse, fulfillment and service processes, and written descriptions together with workstream diagrams. The operations should include 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-degree standards (e.g., time in process) for critical enterprise operations.

• Inventory administration, including physical stock processes, shrink-
control 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 offer a broader range of services. These services provide the smaller publisher a remarkable opportunity and should be fully explored as part of the RFP process.

• Computer systems, including an entire description of the hardware and business software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, consumer data access and reporting capabilities.

• Contingency plans, together with
catastrophe-recovery plans for the facility and enterprise 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 via a flu epidemic.

• Buyer references. While references provided by the distributor will only be from glad clients, they’re nonetheless valuable and ought to be thoroughly researched.

• Payment structure. Distributors typically will quote services on a transaction basis or as a percentage of net sales. The writer should specify the wantred pricing technique, but for ease of comparing prospective costs with historical spending, the percentage of net sales methodology is recommended. In addition to the base costs, the distributor ought to be asked to provide a detailed list of prices that are not included in the base payment, corresponding to excess returns charges, excess inventory, custom-made reporting fees, etc.

• Transition costs. The move out of your existing distributor to your new provider will not 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—including inventory switch, data upload and some other expenses for which the distributor will count on to be reimbursed.

• Pattern contract. You need to have your authorized advisor overview the distributor’s pattern contract.

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

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