The RFP Process Made Simple

Step one in the RFP process is to determine the companies you wish to consider as potential bidders in your distribution business. You’ve, essentially, two options: specialist companies that provide distribution providers to book publishers, and book publishers who handle distribution for other publishers.

Each of these options has its pluses and minuses. Consider each—the broader you solid your net, the higher your options, as well as your understanding of the range of providers available.

Regardless of the players you consider, your RFP must be despatched to a minimum of four bidders, and you should allow ample time (four months, minimum) for the entire process from RFP creation to remaining vendor selection.

Protect Your Info
Earlier than you trade any info, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embrace prohibitions towards divulging confidential monetary and operational info provided by either party, but should contain a clause clearly prohibiting the dialogue of the RFP with unauthorized parties within the publisher’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 main points of the trouble must be shared only on a need-to-know basis. Past the potential nervousness and disruption to your corporation, your negotiating leverage is diminished in case your effort is plagued by data leaks.

Part One: Your Needs and Expectations
An RFP should 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—particularly if 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 ranges, printing technology improves and inventory becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which should translate to reduced working prices for publishers.

Section 1 additionally should embrace, at minimal, quantitative details for what you are promoting’ final full, fiscal 12 months, together with:

Number of active clients
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in both dollars and units
Transaction particulars, together with 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 volume
Common number of books in storage
Specialised service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process necessities for main processes corresponding to income and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming stock, etc.
Be Accurate and In-depth
The quality and quantity of the data 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 incorporate a multiyear view of the knowledge listed above that illustrates each 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 regarding their organizations, the services 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, success and repair processes, and written descriptions together with workmove 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 business operations.

• Inventory management, including physical stock processes, shrink-
management procedures, back-order reporting and management, and audit controls.

• Digital services. Several 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 companies provide the smaller publisher a remarkable opportunity and ought to be fully 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 enterprise systems, EDI/ONIX capabilities, client information access and reporting capabilities.

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

• Customer references. While references provided by the distributor will only be from happy clients, they are nonetheless valuable and ought to be totally researched.

• Fee structure. Distributors typically will quote companies on a transaction foundation or as a proportion of net sales. The writer ought to specify the favorred pricing method, but for ease of comparing prospective prices with historical spending, the share of net sales technique is recommended. In addition to the bottom prices, the distributor must be asked to provide a detailed list of costs that are not included within the base fee, equivalent to excess returns prices, excess inventory, custom-made reporting fees, etc.

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

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

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

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