The RFP Process Made Simple

Step one in the RFP process is to establish the businesses you wish to consider as potential bidders for your distribution business. You have got, essentially, options: specialist firms 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 both—the broader you solid your net, the higher your options, as well as your understanding of the range of services available.

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

Protect Your Data
Before you alternate any data, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions towards divulging confidential monetary and operational information provided by either party, but 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 enterprise model is a significant step, and till the choice is finalized and a transition plan confirmed, the details of the hassle needs to be shared only on a necessity-to-know basis. Beyond the potential nervousness and disruption to what you are promoting, your negotiating leverage is diminished if your effort is affected by information leaks.

Part One: Your Wants and Expectations
An RFP should have two main sections. Part 1 should contain information about your existing operations and your expectations for your business over the three to five years following the transition to the third-party provider.

The latter is particularly necessary—especially for those who see your organization embracing the operational opportunities presented by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to say no to close-commodity ranges, printing technology improves and stock becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which should translate to reduced working costs for publishers.

Part 1 also should include, at minimum, quantitative particulars for your online business’ last full, fiscal yr, together with:

Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction details, together with number of units per bill and number of lines per bill
Number of titles in active backlist
Number of new titles revealed yearly
Examination copy quantity
Common number of books in storage
Specialized service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process necessities for main processes resembling 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 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 is a good suggestion to incorporate a multiyear view of the knowledge listed above that illustrates each historic developments and prospects for the future.

Part Two: Ask the Right Questions
Section 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
related costs.

The RFP should, at minimal, request the following:

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

• Operational descriptions. Request a list of critical warehouse, fulfillment and repair processes, and written descriptions together with workcirculate 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 details of service-degree standards (e.g., time in process) for critical enterprise operations.

• Inventory administration, together with physical stock processes, shrink-
control procedures, back-order reporting and management, 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 services offer the smaller publisher a remarkable opportunity and must be absolutely explored as part of the RFP process.

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

• Contingency plans, including
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 through a flu epidemic.

• Buyer references. While references provided by the distributor will only be from glad customers, they’re nonetheless valuable and needs to be totally researched.

• Fee structure. Distributors typically will quote services on a transaction foundation or as a share of net sales. The publisher should specify the desirered pricing technique, but for ease of comparing prospective prices with historical spending, the share of net sales method is recommended. In addition to the bottom prices, the distributor should be asked to provide an in depth list of prices that are not included within the base fee, equivalent to extra returns fees, extra inventory, custom-made reporting charges, etc.

• Transition costs. The move from your current distributor to your new provider is not going to be without costs. The distributor should be asked to provide an estimate of the transition bills that will likely be billed to you—if any—including inventory transfer, data upload and every other expenses for which the distributor will count on to be reimbursed.

• Pattern contract. You need to have your authorized 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 spend money on it will probably be time well spent.

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