The RFP Process Made Simple

Step one within the RFP process is to establish the companies you want to consider as potential bidders in your distribution business. You have got, essentially, options: specialist corporations 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 each—the broader you cast 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 needs to be sent to a minimum of 4 bidders, and you should permit ample time (four months, minimal) for the complete process from RFP creation to ultimate vendor selection.

Protect Your Information
Before you alternate any information, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA should not only embrace prohibitions in opposition to divulging confidential monetary and operational data provided by either party, however ought to include a clause clearly prohibiting the dialogue of the RFP with unauthorized parties within the publisher’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 main points of the trouble ought to be shared only on a necessity-to-know basis. Past the potential nervousness and disruption to your corporation, your negotiating leverage is diminished in case your effort is tormented by info leaks.

Part One: Your Needs and Expectations
An RFP should have two major sections. Section 1 ought to 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 necessary—especially if you see your group 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 calls for on distribution facilities will undergo dramatic change—all of which should translate to reduced working costs for publishers.

Section 1 additionally ought to embody, at minimal, quantitative particulars for your corporation’ final full, fiscal yr, including:

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 revealed annually
Examination copy quantity
Average number of books in storage
Specialized service requirements, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process necessities for main processes resembling income 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 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 incorporate a multiyear view of the data listed above that illustrates both historic developments 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'd like them to provide and, of course, the
associated costs.

The RFP ought to, at minimal, request the next:

• Distributor background, together with history, ownership, group chart, consumer list and monetary statements.

• Operational descriptions. Request a list of critical warehouse, fulfillment and repair processes, and written descriptions together with workstream diagrams. The operations ought to embrace 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 particulars of service-level standards (e.g., time in process) for critical enterprise operations.

• Inventory management, including physical inventory 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 management service providers and e-book distributors to supply a broader range of services. These providers supply the smaller writer a remarkable opportunity and ought to be fully explored as part of the RFP process.

• Computer systems, including an entire description of the hardware and enterprise software in place, plans for any upgrades or replacement of the enterprise 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 event of a pandemic flu outbreak. A shocking number of publishers have asked their suppliers to provide their enterprise continuity plans for managing by way of a flu epidemic.

• Customer references. While references provided by the distributor will only be from satisfied prospects, they're nonetheless valuable and must be completely researched.

• Charge structure. Distributors typically will quote companies on a transaction basis or as a proportion of net sales. The writer ought to specify the preferred pricing methodology, however for ease of evaluating prospective costs with historical spending, the percentage of net sales methodology is recommended. In addition to the bottom costs, the distributor should be asked to provide an in depth list of costs that aren't included in the base payment, equivalent to extra returns prices, extra inventory, custom-made reporting fees, etc.

• Transition costs. The move out of your existing 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 likely 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.

• Sample contract. You should have your legal advisor assessment the distributor’s sample contract.

A Service Indicator
A carefully crafted RFP is essential to successfully evaluating the potential worth of third-party distribution. The time you invest in it shall be time well spent.

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