The RFP Process Made Simple

Step one within the RFP process is to establish the companies you want to consider as potential bidders in your distribution business. You have got, essentially, two options: specialist firms that provide distribution providers to book publishers, and book publishers who deal with distribution for different publishers.

Each of those 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 services available.

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

Protect Your Information
Earlier than you trade any information, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA mustn’t only embrace prohibitions in opposition to divulging confidential monetary and operational data provided by either party, but should comprise a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the publisher’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 ought to be shared only on a need-to-know basis. Beyond the potential anxiousness and disruption to what you are promoting, your negotiating leverage is diminished in case your effort is affected by information leaks.

Part One: Your Wants and Expectations
An RFP should have main sections. Section 1 should comprise information 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 if you see your organization embracing the operational opportunities offered 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 working costs for publishers.

Section 1 additionally should include, at minimum, quantitative details for your corporation’ final full, fiscal yr, 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, including number of units per bill and number of lines per bill
Number of titles in active backlist
Number of new titles printed annually
Examination copy quantity
Common number of books in storage
Specialized service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process necessities for major processes akin to income and complimentary-copy order success, returns processing, check-in and availability of incoming stock, etc.
Be Accurate and In-depth
The quality and quantity of the data you provide can 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 incorporate a multiyear view of the information listed above that illustrates each historic trends and prospects for the future.

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

The RFP should, at minimum, request the next:

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

• Operational descriptions. Request a list of critical warehouse, achievement and service processes, and written descriptions together with workcirculation diagrams. The operations ought to embrace order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.

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

• Inventory administration, including physical inventory processes, shrink-
control procedures, back-order reporting and administration, and audit controls.

• Digital services. Several main distributors have established strategic alliances with POD specialists, digital asset management service providers and e-book distributors to supply a broader range of services. These companies provide the smaller writer a remarkable opportunity and must be totally explored as part of the RFP process.

• Computer systems, including a complete description of the hardware and business software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, shopper info access and reporting capabilities.

• Contingency plans, together with
catastrophe-recovery plans for the facility and enterprise systems, and a readiness plan within the occasion 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 clients, they are nonetheless valuable and needs to be totally researched.

• Payment structure. Distributors typically will quote companies on a transaction basis or as a percentage of net sales. The writer should specify the choosered pricing method, however for ease of evaluating prospective costs with historical spending, the proportion of net sales methodology is recommended. In addition to the base prices, the distributor should be asked to provide an in depth list of costs that aren’t included within the base payment, resembling extra returns costs, extra stock, customized reporting fees, etc.

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

• Sample contract. You need to have your legal advisor overview the distributor’s sample contract.

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

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