The first step in the RFP process is to establish the companies you want to consider as potential bidders for your distribution business. You could have, essentially, options: specialist firms that provide distribution providers to book publishers, and book publishers who handle distribution for other publishers.
Each of those options has its pluses and minuses. Consider each—the broader you cast your net, the better 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 minimum of 4 bidders, and you should enable ample time (4 months, minimum) for your entire process from RFP creation to final vendor selection.
Protect Your Data
Earlier than you exchange any data, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA should not only include prohibitions towards divulging confidential monetary and operational info provided by either party, however 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 business model is a significant step, and till the choice is finalized and a transition plan confirmed, the details of the hassle ought to be shared only on a need-to-know basis. Past the potential anxiety and disruption to your corporation, your negotiating leverage is diminished in case your effort is stricken by info leaks.
Part One: Your Wants and Expectations
An RFP ought to have main sections. Part 1 ought to contain information about your present operations and your expectations for your online business over the three to 5 years following the transition to the third-party provider.
The latter is particularly necessary—especially should you see your organization embracing the operational opportunities presented by print-on-demand (POD) and short-run digital printing. As POD pricing continues to say no to close-commodity levels, printing technology improves and stock becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating costs for publishers.
Part 1 also ought to embrace, at minimal, quantitative details for your enterprise’ last full, fiscal 12 months, together with:
Number of active prospects
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in each dollars and units
Transaction details, including number of units per invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles printed yearly
Examination copy volume
Common number of books in storage
Specialized service necessities, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for main processes such as income and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the knowledge 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 is a good idea to include a multiyear view of the data listed above that illustrates both historic developments 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, after all, the
The RFP ought to, at minimum, request the next:
• Distributor background, including history, ownership, group chart, shopper list and financial statements.
• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions including workmovement diagrams. The operations should embody 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 business operations.
• Inventory management, including physical inventory processes, shrink-
management procedures, back-order reporting and administration, 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 services supply the smaller writer a remarkable opportunity and must be fully 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 business systems, EDI/ONIX capabilities, consumer info access and reporting capabilities.
• Contingency plans, together with
disaster-recovery plans for the facility and business systems, and a readiness plan within the event of a pandemic flu outbreak. A surprising number of publishers have asked their suppliers to provide their business continuity plans for managing through a flu epidemic.
• Buyer references. While references provided by the distributor will only be from satisfied customers, they are nonetheless valuable and should be completely researched.
• Fee structure. Distributors typically will quote companies on a transaction foundation or as a proportion of net sales. The writer should specify the choosered pricing technique, however for ease of evaluating prospective prices with historical spending, the percentage of net sales technique is recommended. In addition to the base prices, the distributor must be asked to provide a detailed list of costs that aren’t included within the base payment, similar to extra returns prices, excess stock, custom-made reporting fees, etc.
• Transition costs. The move out of your present distributor to your new provider won’t be without costs. The distributor must be asked to provide an estimate of the transition bills that might be billed to you—if any—including inventory transfer, data upload and another expenses for which the distributor will expect to be reimbursed.
• Pattern contract. It’s best to have your authorized advisor overview 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 invest in it will probably be time well spent.
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