The RFP Process Made Simple

Step one in the RFP process is to establish the companies you wish to consider as potential bidders for your distribution business. You’ve gotten, essentially, options: specialist companies that provide distribution providers to book publishers, and book publishers who handle distribution for other publishers.

Each of these 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 should allow ample time (four months, minimum) for the complete process from RFP creation to remaining vendor selection.

Protect Your Information

Before you alternate any information, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA should not only include prohibitions in opposition to divulging confidential financial and operational information provided by either party, but ought to include a clause clearly prohibiting the dialogue of the RFP with unauthorized parties within the writer’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 small print of the hassle should be shared only on a need-to-know basis. Past the potential anxiousness and disruption to your corporation, your negotiating leverage is diminished if your effort is plagued by data leaks.

Part One: Your Needs and Expectations

An RFP ought to have main sections. Section 1 ought to comprise information about your current 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 necessary—especially for those who see your group embracing the operational opportunities presented by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to say no to close-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 operating costs for publishers.

Section 1 also ought to embrace, at minimal, quantitative details for your corporation’ final full, fiscal yr, including:

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 invoice

Number of titles in active backlist

Number of new titles published annually

Examination copy volume

Common number of books in storage

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

Writer service expectations, together with time-in-process necessities for major processes akin 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 knowledge you provide can 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 suggestion to incorporate a multiyear view of the information listed above that illustrates both historic tendencies 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 providers you’ll like them to provide and, of course, the

related costs.

The RFP ought to, at minimum, request the next:

• Distributor background, including history, ownership, organization chart, shopper list and financial statements.

• Operational descriptions. Request a list of critical warehouse, success and service processes, and written descriptions together with workstream diagrams. The operations should embody order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.

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

• Inventory management, together with physical inventory processes, shrink-

management procedures, back-order reporting and administration, and audit controls.

• Digital services. Several main 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 services offer 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 enterprise software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, shopper info access and reporting capabilities.

• Contingency plans, together with

disaster-recovery plans for the facility and enterprise systems, and a readiness plan in the occasion of a pandemic flu outbreak. A shocking 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 must be completely researched.

• Payment structure. Distributors typically will quote providers on a transaction foundation or as a percentage of net sales. The writer ought to specify the choosered pricing methodology, but 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 ought to be asked to provide an in depth list of prices that aren’t included within the base price, similar to excess returns expenses, excess stock, customized reporting fees, etc.

• Transition costs. The move out of your present 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 probably 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.

• Sample contract. You should have your legal advisor evaluation 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 shall be time well spent.

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