The RFP Process Made Simple

Step one within the RFP process is to determine the companies you wish to consider as potential bidders in your distribution business. You could have, essentially, options: specialist firms that provide distribution services to book publishers, and book publishers who handle distribution for other publishers.

Each of those options has its pluses and minuses. Consider both—the broader you cast your net, the higher your options, as well as your understanding of the range of companies available.

Regardless of the players you consider, your RFP should be despatched to a minimal of 4 bidders, and you should enable ample time (four months, minimum) for the whole process from RFP creation to last vendor selection.

Protect Your Information
Earlier than you exchange any info, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA shouldn't only embrace prohibitions against divulging confidential financial and operational info provided by either party, but 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 enterprise model is a significant step, and till the choice is finalized and a transition plan confirmed, the small print of the effort ought to be shared only on a necessity-to-know basis. Beyond the potential nervousness and disruption to what you are promoting, your negotiating leverage is diminished if your effort is affected by data leaks.

Part One: Your Wants and Expectations
An RFP should have two major sections. Part 1 should include information about your existing operations and your expectations for your business over the three to five years following the transition to the third-party provider.

The latter is particularly essential—especially in case you see your organization embracing the operational opportunities offered by print-on-demand (POD) and quick-run digital printing. As POD pricing continues to decline to near-commodity levels, printing technology improves and stock becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which should translate to reduced operating prices for publishers.

Part 1 additionally should include, at minimal, quantitative particulars for your online business’ last full, fiscal yr, together with:

Number of active prospects
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, including number of units per invoice and number of lines per invoice
Number of titles in active backlist
Number of new titles printed yearly
Examination copy volume
Average number of books in storage
Specialised service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Writer 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 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's a good idea to include a multiyear view of the knowledge listed above that illustrates each historic trends 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 providers you'd like them to provide and, of course, the
associated costs.

The RFP ought to, at minimum, request the following:

• Distributor background, including history, ownership, organization chart, client list and financial statements.

• Operational descriptions. Request a list of critical warehouse, achievement and repair processes, and written descriptions together with workstream diagrams. The operations should embody order intake, pick, pack and ship, customer service, invoicing, credit and collections, and processing of incoming shipments.

• Service-stage standards. Request that the distributor provide details of service-level standards (e.g., time in process) for critical business operations.

• Stock administration, together with physical inventory processes, shrink-
management procedures, back-order reporting and management, and audit controls.

• Digital services. Several 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 must 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 enterprise systems, EDI/ONIX capabilities, shopper information access and reporting capabilities.

• Contingency plans, together with
disaster-recovery plans for the facility and business systems, and a readiness plan in 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 way of a flu epidemic.

• Customer references. While references provided by the distributor will only be from glad prospects, they are nonetheless valuable and should be completely researched.

• Charge structure. Distributors typically will quote providers on a transaction foundation or as a share of net sales. The publisher ought to specify the desirered pricing technique, however for ease of comparing prospective prices with historical spending, the percentage of net sales technique is recommended. In addition to the base costs, the distributor ought to be asked to provide a detailed list of costs that are not included in the base charge, equivalent to excess returns charges, extra inventory, customized reporting fees, etc.

• Transition costs. The move from your current distributor to your new provider is not going to be without costs. The distributor should be asked to provide an estimate of the transition bills that will probably be billed to you—if any—including inventory switch, data upload and another bills for which the distributor will expect to be reimbursed.

• Pattern contract. It is best to have your authorized advisor assessment the distributor’s pattern contract.

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

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