Step one within the RFP process is to identify the companies you wish to consider as potential bidders for your distribution business. You could have, essentially, two options: specialist companies that provide distribution companies to book publishers, and book publishers who handle distribution for different publishers.
Each of those options has its pluses and minuses. Consider each—the broader you solid your net, the better your options, as well as your understanding of the range of companies available.
Regardless of the players you consider, your RFP needs to be despatched to a minimal of four bidders, and you should enable ample time (four months, minimum) for the whole process from RFP creation to remaining vendor selection.
Protect Your Data
Before you alternate any data, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions in opposition to divulging confidential monetary and operational info provided by either party, however should contain a clause clearly prohibiting the dialogue 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 hassle should be shared only on a need-to-know basis. Beyond the potential nervousness and disruption to your corporation, your negotiating leverage is diminished if your effort is stricken by data leaks.
Part One: Your Needs and Expectations
An RFP should have two main sections. Section 1 should comprise details about your current operations and your expectations for your corporation over the three to five years following the transition to the third-party provider.
The latter is particularly vital—particularly in case you see your group embracing the operational opportunities offered by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to decline to near-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 prices for publishers.
Section 1 additionally ought to embody, at minimal, quantitative particulars for your online business’ final full, fiscal 12 months, including:
Number of active prospects
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in both dollars and units
Transaction particulars, including number of units per bill and number of lines per bill
Number of titles in active backlist
Number of new titles published annually
Examination copy volume
Common number of books in storage
Specialized service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for major processes comparable to revenue and complimentary-copy order achievement, returns processing, check-in and availability of incoming inventory, etc.
Be Accurate and In-depth
The quality and quantity of the information 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’s a good idea to incorporate a multiyear view of the knowledge listed above that illustrates both 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’d like them to provide and, in fact, the
The RFP ought to, at minimum, request the next:
• Distributor background, including history, ownership, organization chart, consumer list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, success and repair processes, and written descriptions together with workmove diagrams. The operations ought to embody order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.
• Service-degree standards. Request that the distributor provide details of service-level standards (e.g., time in process) for critical enterprise operations.
• Inventory administration, together with physical stock processes, shrink-
control procedures, back-order reporting and management, and audit controls.
• Digital services. Several major 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 providers supply the smaller publisher a remarkable opportunity and must be totally explored as part of the RFP process.
• Computer systems, together with an entire description of the hardware and enterprise software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, client data access and reporting capabilities.
• Contingency plans, including
disaster-recovery plans for the facility and enterprise systems, and a readiness plan in the occasion of a pandemic flu outbreak. A surprising number of publishers have asked their suppliers to provide their business continuity plans for managing by a flu epidemic.
• Customer references. While references provided by the distributor will only be from satisfied prospects, they’re nonetheless valuable and ought to be thoroughly researched.
• Fee structure. Distributors typically will quote companies on a transaction foundation or as a share of net sales. The publisher ought to specify the wantred pricing methodology, but for ease of evaluating prospective prices with historical spending, the share of net sales method is recommended. In addition to the base costs, the distributor needs to be asked to provide an in depth list of costs that are not included in the base fee, equivalent to excess returns expenses, extra stock, custom-made reporting charges, etc.
• Transition costs. The move from your present distributor to your new provider will not be without costs. The distributor needs to be asked to provide an estimate of the transition bills that will be billed to you—if any—including stock transfer, data upload and every other expenses for which the distributor will count on to be reimbursed.
• Sample contract. You must have your legal advisor assessment the distributor’s sample contract.
A Service Indicator
A caretotally crafted RFP is essential to effectively evaluating the potential worth of third-party distribution. The time you invest in it will be time well spent.
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