Step one within the RFP process is to identify the companies you want to consider as potential bidders in your distribution business. You’ve got, essentially, options: specialist firms that provide distribution services to book publishers, and book publishers who deal with 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 minimal of four bidders, and you should enable ample time (four months, minimum) for all the process from RFP creation to final vendor selection.
Protect Your Data
Earlier than you change any data, all prospective bidders must be required to sign a non-disclosure agreement (NDA). The NDA mustn’t only embody prohibitions towards divulging confidential monetary and operational information provided by either party, but should comprise 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 until the choice is finalized and a transition plan confirmed, the small print of the trouble 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 if your effort is affected by information leaks.
Part One: Your Wants and Expectations
An RFP ought to have two major sections. Part 1 should comprise details about your current 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 necessary—especially in case you see your group embracing the operational opportunities introduced by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to say no to close-commodity ranges, printing technology improves and inventory turns into virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working prices for publishers.
Section 1 additionally should include, at minimum, quantitative details for your online business’ last full, fiscal yr, 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 quantity
Average number of books in storage
Specialised service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process requirements 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 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 traits and prospects for the future.
Part Two: Ask the Proper Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the services you’ll like them to provide and, in fact, the
The RFP should, at minimum, request the following:
• Distributor background, including history, ownership, group chart, consumer list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, success and service processes, and written descriptions together with workmovement diagrams. The operations ought to 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 administration, including physical stock processes, shrink-
control procedures, back-order reporting and management, 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 providers offer the smaller publisher a remarkable opportunity and should be absolutely 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 enterprise systems, EDI/ONIX capabilities, shopper information access and reporting capabilities.
• Contingency plans, including
disaster-recovery plans for the facility and enterprise systems, and a readiness plan within the event of a pandemic flu outbreak. A stunning 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 clients, they’re nonetheless valuable and should be completely researched.
• Charge structure. Distributors typically will quote services on a transaction basis or as a proportion of net sales. The publisher should specify the wantred pricing method, however for ease of comparing prospective prices with historical spending, the percentage of net sales methodology is recommended. In addition to the bottom prices, the distributor must be asked to provide a detailed list of costs that aren’t included in the base charge, reminiscent of extra returns prices, extra inventory, customized reporting charges, etc.
• Transition costs. The move out of your existing distributor to your new provider won’t be without costs. The distributor should be asked to provide an estimate of the transition bills that can be billed to you—if any—including stock switch, data upload and another bills for which the distributor will expect to be reimbursed.
• Sample contract. You need to have your authorized advisor evaluation the distributor’s pattern contract.
A Service Indicator
A caretotally crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you put money into it will be time well spent.
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