Step one in the RFP process is to determine the businesses you want to consider as potential bidders on your distribution business. You might have, essentially, two options: specialist firms that provide distribution providers 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 forged your net, the higher your options, as well as your understanding of the range of services available.
Regardless of the players you consider, your RFP ought to be despatched to a minimal of four bidders, and it is best to enable ample time (four months, minimal) for your complete process from RFP creation to remaining vendor selection.
Protect Your Data
Before you change any information, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA shouldn’t only embrace prohibitions towards divulging confidential monetary and operational info provided by either party, however ought to contain 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 details of the trouble ought to be shared only on a necessity-to-know basis. Beyond the potential anxiety and disruption to your corporation, your negotiating leverage is diminished in case your effort is affected by info leaks.
Part One: Your Wants and Expectations
An RFP should have main sections. Part 1 should include information about your existing operations and your expectations for what you are promoting over the three to 5 years following the transition to the third-party provider.
The latter is particularly essential—especially when you see your organization embracing the operational opportunities introduced by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to say no to near-commodity levels, printing technology improves and inventory turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced working prices for publishers.
Section 1 also ought to include, at minimal, quantitative particulars for what you are promoting’ final full, fiscal 12 months, together with:
Number of active clients
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in both 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 annually
Examination copy volume
Common number of books in storage
Specialised service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, including time-in-process requirements for main processes akin to revenue and complimentary-copy order success, returns processing, check-in and availability of incoming inventory, 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 idea to incorporate a multiyear view of the information listed above that illustrates both 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 relating to their organizations, the companies you’d like them to provide and, in fact, the
The RFP ought to, at minimal, request the next:
• Distributor background, including history, ownership, group chart, shopper list and financial statements.
• Operational descriptions. Request a list of critical warehouse, achievement and service processes, and written descriptions together with workstream diagrams. The operations ought to include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-level standards. Request that the distributor provide details of service-stage standards (e.g., time in process) for critical business operations.
• Stock management, together with physical stock processes, shrink-
management procedures, back-order reporting and management, and audit controls.
• Digital services. Several main distributors have established strategic alliances with POD specialists, digital asset administration service providers and e-book distributors to offer a broader range of services. These companies provide the smaller publisher a remarkable opportunity and needs to be absolutely explored as part of the RFP process.
• Computer systems, including a complete description of the hardware and enterprise software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, consumer 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 through a flu epidemic.
• Customer references. While references provided by the distributor will only be from satisfied prospects, they’re nonetheless valuable and needs to be totally researched.
• Price structure. Distributors typically will quote services on a transaction foundation or as a proportion of net sales. The publisher ought to specify the favorred pricing method, but for ease of comparing prospective prices with historical spending, the percentage of net sales method is recommended. In addition to the bottom prices, the distributor must be asked to provide an in depth list of costs that aren’t included in the base charge, equivalent to excess returns expenses, excess inventory, 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 bills that will probably be billed to you—if any—including stock transfer, data upload and any other expenses for which the distributor will expect to be reimbursed.
• Sample contract. It is best to have your authorized advisor evaluation the distributor’s pattern contract.
A Service Indicator
A careabsolutely crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you put money into it might be time well spent.
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