Step one within the RFP process is to determine the businesses you want to consider as potential bidders for your distribution business. You might have, essentially, two options: specialist firms that provide distribution providers to book publishers, and book publishers who deal with distribution for different publishers.
Each of these options has its pluses and minuses. Consider both—the broader you forged 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 (four months, minimum) for the entire process from RFP creation to last vendor selection.
Protect Your Info
Earlier than you trade any info, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions in opposition to divulging confidential financial and operational info provided by either party, but ought to comprise 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 until the decision is finalized and a transition plan confirmed, the small print of the trouble ought to be shared only on a need-to-know basis. Past the potential nervousness and disruption to your business, your negotiating leverage is diminished if your effort is tormented by data leaks.
Part One: Your Wants and Expectations
An RFP should have major sections. Part 1 should contain details about your existing operations and your expectations for your small business over the three to 5 years following the transition to the third-party provider.
The latter is particularly important—especially if you see your organization embracing the operational opportunities introduced by print-on-demand (POD) and short-run digital printing. As POD pricing continues to say no to near-commodity levels, printing technology improves and inventory becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced working costs for publishers.
Section 1 also ought to embody, at minimal, quantitative details for your small business’ final full, fiscal 12 months, together with:
Number of active customers
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 bill and number of lines per bill
Number of titles in active backlist
Number of new titles printed annually
Examination copy volume
Average number of books in storage
Specialised service necessities, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process necessities for major processes reminiscent of 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 data you provide may 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 each historic trends and prospects for the future.
Part Two: Ask the Proper Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the services you’ll like them to provide and, of course, the
The RFP should, at minimal, request the next:
• Distributor background, together with history, ownership, group chart, consumer list and financial statements.
• Operational descriptions. Request a list of critical warehouse, achievement and service processes, and written descriptions together with workcirculation diagrams. The operations should embrace order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-degree standards. Request that the distributor provide details of service-degree standards (e.g., time in process) for critical business operations.
• Stock administration, together with physical stock processes, shrink-
management procedures, back-order reporting and management, and audit controls.
• Digital services. Several 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 writer a remarkable opportunity and ought to be absolutely explored as part of the RFP process.
• Computer systems, including a whole description of the hardware and business software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, shopper data access and reporting capabilities.
• Contingency plans, together with
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 by a flu epidemic.
• Customer references. While references provided by the distributor will only be from satisfied customers, they’re nonetheless valuable and must be totally researched.
• Payment structure. Distributors typically will quote companies on a transaction basis or as a proportion of net sales. The writer should specify the choosered pricing technique, however for ease of comparing prospective prices with historical spending, the share of net sales methodology is recommended. In addition to the base prices, the distributor should be asked to provide an in depth list of costs that are not included within the base fee, corresponding to extra returns prices, extra inventory, customized reporting fees, etc.
• Transition costs. The move out of your current distributor to your new provider is not going to be without costs. The distributor ought to be asked to provide an estimate of the transition expenses that will likely be billed to you—if any—together with stock transfer, data upload and any other expenses for which the distributor will anticipate to be reimbursed.
• Sample contract. It is best to have your authorized advisor assessment the distributor’s pattern contract.
A Service Indicator
A caretotally crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you put money into it might be time well spent.
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