The RFP Process Made Simple

The first step in the RFP process is to determine the companies you want to consider as potential bidders to your distribution business. You could have, essentially, two options: specialist companies that provide distribution companies 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 forged your net, the higher your options, as well as your understanding of the range of companies available.

Regardless of the players you consider, your RFP must be despatched to a minimal of four bidders, and it is best to enable ample time (4 months, minimal) for the entire process from RFP creation to ultimate vendor selection.

Protect Your Data
Before you alternate any data, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embody prohibitions against 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 decision is finalized and a transition plan confirmed, the details of the hassle must be shared only on a necessity-to-know basis. Past the potential nervousness and disruption to your corporation, your negotiating leverage is diminished in case your effort is plagued by info leaks.

Part One: Your Wants and Expectations
An RFP ought to have two major sections. Part 1 should contain details about your current operations and your expectations for your enterprise over the three to five years following the transition to the third-party provider.

The latter is particularly necessary—particularly if you see your group embracing the operational opportunities offered by print-on-demand (POD) and short-run digital printing. As POD pricing continues to decline to close-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 prices for publishers.

Section 1 also ought to embrace, at minimum, quantitative particulars for your business’ final full, fiscal year, 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 details, together with number of units per bill and number of lines per bill
Number of titles in active backlist
Number of new titles published annually
Examination copy volume
Average 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 main processes comparable 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 information 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’s a good idea to include a multiyear view of the data listed above that illustrates both historic trends and prospects for the future.

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

The RFP ought to, at minimum, request the next:

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

• Operational descriptions. Request a list of critical warehouse, success and repair processes, and written descriptions including workflow diagrams. The operations ought to 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-level standards (e.g., time in process) for critical enterprise operations.

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

• Digital services. A number of major 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 offer the smaller publisher a remarkable opportunity and must be fully explored as part of the RFP process.

• Computer systems, together with a complete description of the hardware and enterprise 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 business systems, and a readiness plan within the event of a pandemic flu outbreak. A shocking number of publishers have asked their suppliers to provide their enterprise continuity plans for managing by way of a flu epidemic.

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

• Price structure. Distributors typically will quote services on a transaction foundation or as a share of net sales. The writer ought to specify the wantred pricing methodology, however for ease of evaluating prospective costs with historical spending, the proportion of net sales methodology is recommended. In addition to the base costs, the distributor must be asked to provide an in depth list of costs that aren’t included in the base fee, reminiscent of excess returns costs, extra inventory, custom-made reporting fees, etc.

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

• Pattern contract. You should have your legal advisor review 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 spend money on it shall be time well spent.

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