Step one in the RFP process is to determine the companies you want to consider as potential bidders for your distribution business. You’ve got, essentially, two options: specialist firms that provide distribution services to book publishers, and book publishers who deal with distribution for other publishers.
Every of these options has its pluses and minuses. Consider both—the broader you solid your net, the better your options, as well as your understanding of the range of companies available.
Regardless of the players you consider, your RFP ought to be sent to a minimum of four bidders, and you should enable ample time (4 months, minimal) for the entire process from RFP creation to closing vendor selection.
Protect Your Information
Earlier than you alternate any data, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embody prohibitions towards divulging confidential monetary and operational data provided by either party, but ought to include 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 necessity-to-know basis. Beyond the potential nervousness and disruption to what you are promoting, your negotiating leverage is diminished if your effort is stricken by info leaks.
Part One: Your Needs and Expectations
An RFP ought to have two major sections. Section 1 ought to contain information about your present operations and your expectations for what you are promoting over the three to 5 years following the transition to the third-party provider.
The latter is particularly necessary—especially when 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 turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working prices for publishers.
Part 1 also should embrace, at minimal, quantitative details for your corporation’ last full, fiscal year, including:
Number of active prospects
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, together with number of units per invoice and number of lines per bill
Number of titles in active backlist
Number of new titles revealed annually
Examination copy quantity
Average number of books in storage
Specialised service requirements, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process necessities for main processes equivalent to revenue 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 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 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
Part 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the companies you’ll like them to provide and, in fact, the
The RFP should, at minimum, request the following:
• Distributor background, including history, ownership, group chart, shopper list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions together with workflow diagrams. The operations ought to embody 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-degree standards (e.g., time in process) for critical business operations.
• Inventory management, including physical inventory processes, shrink-
control procedures, back-order reporting and administration, 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 providers provide the smaller publisher 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 business systems, EDI/ONIX capabilities, consumer information access and reporting capabilities.
• Contingency plans, together with
catastrophe-recovery plans for the facility and enterprise 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 means of a flu epidemic.
• Buyer references. While references provided by the distributor will only be from satisfied prospects, they’re nonetheless valuable and should be completely researched.
• Fee structure. Distributors typically will quote companies on a transaction basis or as a percentage of net sales. The writer ought to specify the preferred pricing methodology, but for ease of comparing prospective costs with historical spending, the percentage of net sales methodology is recommended. In addition to the bottom prices, the distributor should be asked to provide a detailed list of prices that aren’t included in the base charge, reminiscent of extra returns fees, excess stock, customized reporting fees, etc.
• Transition costs. The move from your present 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—including stock transfer, data upload and every other expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. It is best to have your legal advisor evaluation the distributor’s sample contract.
A Service Indicator
A carefully crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you spend money on it will likely be time well spent.
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