The RFP Process Made Simple
The first step within the RFP process is to identify the businesses you want to consider as potential bidders to your distribution business. You have 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 each—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 ought to be sent to a minimum of 4 bidders, and it’s best to enable ample time (4 months, minimal) for the complete process from RFP creation to closing vendor selection.
Protect Your Info
Earlier than you alternate any info, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA should not only include prohibitions in opposition to divulging confidential financial and operational info provided by either party, but ought to contain a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the writer’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 main points of the effort must be shared only on a need-to-know basis. Beyond the potential nervousness and disruption to your enterprise, your negotiating leverage is diminished in case your effort is suffering from information leaks.
Part One: Your Wants and Expectations
An RFP should have two main sections. Part 1 should comprise details about your present operations and your expectations for your enterprise over the three to 5 years following the transition to the third-party provider.
The latter is particularly vital—especially if you happen to 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 ranges, printing technology improves and stock turns into virtual, the calls for 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 particulars for your corporation’ last full, fiscal 12 months, including:
Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, together with number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles published annually
Examination copy volume
Average number of books in storage
Specialized service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for major processes corresponding to revenue and complimentary-copy order achievement, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the information 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’s a good idea to include a multiyear view of the knowledge listed above that illustrates both 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 relating to their organizations, the companies you’ll like them to provide and, in fact, the
The RFP ought to, at minimal, request the following:
• Distributor background, including history, ownership, organization chart, client list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions including workmove diagrams. The operations should embody 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-stage standards (e.g., time in process) for critical business operations.
• Inventory management, together with physical inventory processes, shrink-
control procedures, back-order reporting and administration, and audit controls.
• Digital services. A number of 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 supply the smaller publisher a remarkable opportunity and ought to be absolutely explored as part of the RFP process.
• Computer systems, together with a complete description of the hardware and business software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, client information access and reporting capabilities.
• Contingency plans, including
catastrophe-recovery plans for the facility and enterprise systems, and a readiness plan in the event of a pandemic flu outbreak. A stunning number of publishers have asked their suppliers to provide their business continuity plans for managing via a flu epidemic.
• Customer references. While references provided by the distributor will only be from satisfied prospects, they are nonetheless valuable and needs to be totally researched.
• Payment structure. Distributors typically will quote services on a transaction basis or as a percentage of net sales. The publisher should specify the preferred pricing method, however for ease of evaluating prospective costs with historical spending, the percentage of net sales technique is recommended. In addition to the base costs, the distributor must be asked to provide a detailed list of prices that aren’t included within the base fee, corresponding to excess returns fees, excess stock, customized reporting fees, etc.
• Transition costs. The move out of your current distributor to your new provider will not be without costs. The distributor must be asked to provide an estimate of the transition expenses that will likely be billed to you—if any—including inventory transfer, data upload and every other bills for which the distributor will expect to be reimbursed.
• Pattern contract. You need to have your authorized advisor review the distributor’s sample contract.
A Service Indicator
A carefully crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you invest in it shall be time well spent.
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