Step one in the RFP process is to determine the businesses you wish to consider as potential bidders for your distribution business. You’ve gotten, essentially, two options: specialist companies that provide distribution providers to book publishers, and book publishers who handle distribution for different publishers.
Each 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 services available.
Regardless of the players you consider, your RFP ought to be sent to a minimal of four bidders, and you must allow ample time (four months, minimum) for your entire process from RFP creation to ultimate vendor selection.
Protect Your Data
Earlier than you trade any information, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only include prohibitions in opposition to divulging confidential financial and operational info provided by either party, however should contain a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the publisher’s organization. Moving to a third-party distribution business model is a significant step, and till the decision is finalized and a transition plan confirmed, the small print of the effort must be shared only on a necessity-to-know basis. Beyond the potential anxiousness and disruption to your corporation, your negotiating leverage is diminished if your effort is plagued by info leaks.
Part One: Your Needs and Expectations
An RFP ought to have two main sections. Section 1 should comprise details about your present operations and your expectations for your business over the three to 5 years following the transition to the third-party provider.
The latter is particularly important—particularly in case you see your organization embracing the operational opportunities presented by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to close-commodity levels, 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 operating costs for publishers.
Section 1 also ought to embody, at minimum, quantitative details for your enterprise’ last full, fiscal yr, together with:
Number of active clients
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 invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles published yearly
Examination copy volume
Common number of books in storage
Specialised service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for main processes reminiscent of 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 information you provide may 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 knowledge listed above that illustrates both historic tendencies 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 minimum, request the following:
• Distributor background, together with history, ownership, organization chart, shopper list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, fulfillment and repair processes, and written descriptions including workmove diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-stage standards. Request that the distributor provide particulars 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. A number of major distributors have established strategic alliances with POD specialists, digital asset management service providers and e-book distributors to offer a broader range of services. These companies supply the smaller publisher a remarkable opportunity and ought to be fully 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 info access and reporting capabilities.
• Contingency plans, together with
catastrophe-recovery plans for the facility and business 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 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.
• Price structure. Distributors typically will quote services on a transaction foundation or as a share of net sales. The writer should specify the wantred pricing method, but for ease of evaluating prospective costs with historical spending, the proportion of net sales method is recommended. In addition to the bottom prices, the distributor must be asked to provide a detailed list of costs that are not included within the base charge, reminiscent of excess returns prices, excess inventory, custom-made reporting charges, etc.
• Transition costs. The move out of your present distributor to your new provider will not be without costs. The distributor ought to be asked to provide an estimate of the transition expenses that will be billed to you—if any—together with inventory transfer, data upload and any other bills for which the distributor will anticipate to be reimbursed.
• Pattern contract. You should have your legal advisor evaluation the distributor’s pattern contract.
A Service Indicator
A careabsolutely crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you put money into it will probably be time well spent.
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