The first step in the RFP process is to identify the companies you want to consider as potential bidders on your distribution business. You’ve gotten, essentially, two options: specialist companies that provide distribution companies to book publishers, and book publishers who handle distribution for other publishers.
Every 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 should be despatched to a minimal of 4 bidders, and you need to allow ample time (4 months, minimal) for your complete process from RFP creation to last vendor selection.
Protect Your Info
Before you exchange any information, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA should not only embrace prohibitions towards divulging confidential monetary and operational data 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 main points of the hassle must be shared only on a necessity-to-know basis. Beyond the potential nervousness and disruption to your enterprise, your negotiating leverage is diminished if your effort is plagued by info leaks.
Part One: Your Wants and Expectations
An RFP should have two main sections. Section 1 should comprise information 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 essential—particularly in the event you see your group embracing the operational opportunities offered by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to say no to close-commodity ranges, printing technology improves and inventory turns into 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 embody, at minimal, quantitative particulars for your small business’ final full, fiscal yr, including:
Number of active clients
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction details, together with number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles published yearly
Examination copy quantity
Average number of books in storage
Specialised service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process necessities for major processes comparable to revenue 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 is a good idea to incorporate a multiyear view of the information listed above that illustrates each historic trends and prospects for the future.
Part Two: Ask the Proper Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions relating to their organizations, the providers you would like them to provide and, in fact, the
The RFP ought to, 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, fulfillment and repair processes, and written descriptions together with workflow diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-stage standards. Request that the distributor provide details of service-level standards (e.g., time in process) for critical business operations.
• Stock management, together with 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 management service providers and e-book distributors to supply a broader range of services. These companies provide the smaller writer a remarkable opportunity and needs to be fully explored as part of the RFP process.
• Computer systems, including a whole description of the hardware and enterprise software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, consumer data access and reporting capabilities.
• Contingency plans, including
disaster-recovery plans for the facility and business systems, and a readiness plan within 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 means of a flu epidemic.
• Customer references. While references provided by the distributor will only be from glad prospects, they are nonetheless valuable and needs to be totally researched.
• Fee structure. Distributors typically will quote companies on a transaction basis or as a proportion of net sales. The publisher should specify the choosered pricing technique, but for ease of evaluating prospective costs with historical spending, the proportion of net sales methodology is recommended. In addition to the bottom prices, the distributor should be asked to provide an in depth list of prices that are not included within the base price, such as excess returns charges, extra stock, personalized reporting charges, etc.
• Transition costs. The move out of your existing 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 shall be billed to you—if any—including stock switch, data upload and some other bills for which the distributor will expect to be reimbursed.
• Pattern contract. It’s best to have your legal advisor evaluate the distributor’s sample contract.
A Service Indicator
A careabsolutely crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you invest in it will be time well spent.
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