The RFP Process Made Simple

The first step within the RFP process is to determine the businesses you wish to consider as potential bidders to your distribution business. You will have, essentially, options: specialist firms that provide distribution services to book publishers, and book publishers who handle distribution for different publishers.

Each of those options has its pluses and minuses. Consider each—the broader you cast 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 sent to a minimum of 4 bidders, and you must permit ample time (four months, minimum) for the complete process from RFP creation to remaining vendor selection.

Protect Your Data
Earlier than you trade any information, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions towards divulging confidential financial and operational information provided by either party, but should contain a clause clearly prohibiting the discussion 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 choice is finalized and a transition plan confirmed, the small print of the hassle needs to be shared only on a need-to-know basis. Beyond the potential anxiousness and disruption to your enterprise, your negotiating leverage is diminished in case your effort is plagued by information leaks.

Part One: Your Needs and Expectations
An RFP should have two major sections. Section 1 ought to include details about your present 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 important—especially in case you see your group embracing the operational opportunities introduced by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to say no to near-commodity levels, 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 working costs for publishers.

Section 1 additionally should embody, at minimum, quantitative particulars for your small business’ final full, fiscal year, together with:

Number of active prospects
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, together with number of units per invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles printed yearly
Examination copy volume
Average number of books in storage
Specialized service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process requirements for main processes comparable 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 knowledge you provide will 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 include a multiyear view of the data listed above that illustrates both historic tendencies and prospects for the future.

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

The RFP should, at minimal, request the next:

• Distributor background, including history, ownership, organization chart, client list and financial statements.

• Operational descriptions. Request a list of critical warehouse, success and repair processes, and written descriptions together with workcirculate diagrams. The operations should embrace 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 particulars of service-stage standards (e.g., time in process) for critical business operations.

• Stock management, together with physical stock processes, shrink-
control procedures, back-order reporting and management, and audit controls.

• Digital services. A number of main 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 companies provide the smaller publisher a remarkable opportunity and ought to be absolutely 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 information access and reporting capabilities.

• Contingency plans, together with
disaster-recovery plans for the facility and enterprise systems, and a readiness plan within the event of a pandemic flu outbreak. A stunning number of publishers have asked their suppliers to provide their business continuity plans for managing through a flu epidemic.

• Customer references. While references provided by the distributor will only be from satisfied customers, they’re nonetheless valuable and ought to be completely researched.

• Price structure. Distributors typically will quote companies on a transaction basis or as a percentage of net sales. The publisher ought to specify the choosered pricing methodology, however for ease of comparing prospective costs with historical spending, the percentage of net sales method is recommended. In addition to the bottom costs, the distributor should be asked to provide an in depth list of prices that are not included in the base fee, reminiscent of excess returns prices, excess inventory, personalized reporting fees, etc.

• Transition costs. The move out of your present distributor to your new provider won’t be without costs. The distributor needs to be asked to provide an estimate of the transition bills that will be billed to you—if any—including inventory transfer, data upload and some other expenses for which the distributor will anticipate to be reimbursed.

• Sample contract. It’s best to have your authorized advisor review 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 spend money on it might be time well spent.

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