Step one in the RFP process is to identify the businesses you want to consider as potential bidders on your distribution business. You will have, essentially, two options: specialist corporations that provide distribution providers to book publishers, and book publishers who deal with distribution for different publishers.
Every of those options has its pluses and minuses. Consider both—the broader you forged your net, the better your options, as well as your understanding of the range of providers available.
Regardless of the players you consider, your RFP needs to be despatched to a minimum of four bidders, and it’s best to allow ample time (4 months, minimum) for the whole process from RFP creation to ultimate vendor selection.
Protect Your Information
Earlier than you alternate any info, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embrace prohibitions towards divulging confidential monetary and operational data 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 enterprise model is a significant step, and until the choice is finalized and a transition plan confirmed, the small print of the effort needs to be shared only on a necessity-to-know basis. Beyond the potential anxiousness and disruption to your enterprise, your negotiating leverage is diminished if your effort is stricken by info leaks.
Part One: Your Needs and Expectations
An RFP should have major sections. Section 1 should include details about your present operations and your expectations for your small business over the three to five years following the transition to the third-party provider.
The latter is particularly important—particularly if you happen to see your organization embracing the operational opportunities presented by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to say no to near-commodity ranges, printing technology improves and stock turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working prices for publishers.
Part 1 additionally should embrace, at minimal, quantitative details for your small 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 each dollars and units
Transaction details, including number of units per bill and number of lines per invoice
Number of titles in active backlist
Number of new titles printed yearly
Examination copy volume
Average number of books in storage
Specialized service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process necessities for main processes akin to 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 information 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 is a good idea to include a multiyear view of the knowledge listed above that illustrates each historic traits and prospects for the future.
Part Two: Ask the Right Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the services you would like them to provide and, in fact, the
The RFP ought to, at minimal, request the following:
• Distributor background, together with history, ownership, organization chart, client list and financial statements.
• Operational descriptions. Request a list of critical warehouse, success and repair processes, and written descriptions including workmovement diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-degree standards. Request that the distributor provide particulars of service-stage standards (e.g., time in process) for critical business operations.
• Inventory management, together with physical stock 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 companies supply the smaller writer a remarkable opportunity and should be fully explored as part of the RFP process.
• Computer systems, including a complete description of the hardware and business software in place, plans for any upgrades or replacement of the enterprise systems, EDI/ONIX capabilities, client data access and reporting capabilities.
• Contingency plans, together with
disaster-recovery plans for the facility and business 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 business continuity plans for managing by a flu epidemic.
• Buyer references. While references provided by the distributor will only be from satisfied clients, they’re nonetheless valuable and must be thoroughly researched.
• Payment structure. Distributors typically will quote companies on a transaction foundation or as a proportion of net sales. The writer ought to specify the desirered pricing method, but for ease of comparing prospective costs with historical spending, the percentage of net sales method is recommended. In addition to the bottom costs, the distributor must be asked to provide a detailed list of prices that are not included in the base payment, equivalent to excess returns expenses, excess stock, customized reporting charges, etc.
• Transition costs. The move out of your current distributor to your new provider won’t be without costs. The distributor must be asked to provide an estimate of the transition expenses that will be billed to you—if any—including stock transfer, data upload and another expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. You need to have your legal advisor evaluation the distributor’s pattern contract.
A Service Indicator
A careabsolutely crafted RFP is essential to effectively evaluating the potential worth of third-party distribution. The time you put money into it shall be time well spent.
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