The RFP Process Made Simple

Step one within the RFP process is to determine the companies you wish to consider as potential bidders on your distribution business. You’ve got, essentially, two options: specialist firms that provide distribution companies to book publishers, and book publishers who handle distribution for other publishers.

Each of those 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 services available.

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

Protect Your Info

Before you trade any information, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only include prohibitions against divulging confidential monetary and operational information provided by either party, however should 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 decision is finalized and a transition plan confirmed, the details of the effort needs to be shared only on a necessity-to-know basis. Past the potential anxiety and disruption to your online business, your negotiating leverage is diminished in case your effort is affected by data leaks.

Part One: Your Wants and Expectations

An RFP ought to have major sections. Part 1 ought to contain details about your existing 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 vital—especially when you see your group embracing the operational opportunities introduced by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to near-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 working prices for publishers.

Section 1 also should include, at minimum, quantitative details for your 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 both dollars and units

Transaction particulars, including 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 quantity

Average number of books in storage

Specialized service necessities, including kitting, international shipments, sticker application, re-jacketing, etc.

Writer service expectations, including time-in-process requirements for main processes similar 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 data you provide could 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 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 regarding their organizations, the services you would like them to provide and, of course, the

associated costs.

The RFP should, at minimum, request the next:

• Distributor background, together with history, ownership, group chart, shopper 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 service, invoicing, credit and collections, and processing of incoming shipments.

• Service-degree standards. Request that the distributor provide details of service-level standards (e.g., time in process) for critical business operations.

• Stock administration, together with physical inventory 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 administration service providers and e-book distributors to supply a broader range of services. These services supply the smaller writer a remarkable opportunity and needs to be absolutely 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, consumer data access and reporting capabilities.

• Contingency plans, including

disaster-recovery plans for the facility and enterprise systems, and a readiness plan in the occasion of a pandemic flu outbreak. A stunning number of publishers have asked their suppliers to provide their enterprise continuity plans for managing via a flu epidemic.

• Customer references. While references provided by the distributor will only be from happy clients, they are nonetheless valuable and needs to be thoroughly researched.

• Price structure. Distributors typically will quote services on a transaction basis or as a share of net sales. The writer ought to specify the desirered pricing methodology, however for ease of evaluating prospective prices with historical spending, the share of net sales technique 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 price, comparable to extra returns costs, extra stock, personalized reporting fees, etc.

• Transition costs. The move from your existing distributor to your new provider is not going to be without costs. The distributor must be asked to provide an estimate of the transition bills that might be billed to you—if any—together with inventory switch, data upload and every other bills for which the distributor will anticipate to be reimbursed.

• Pattern contract. You need to have your authorized advisor review the distributor’s sample 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 likely be time well spent.

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