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The RFP Process Made Simple
Step one within the RFP process is to determine the companies you want to consider as potential bidders in your distribution business. You've gotten, essentially, two options: specialist companies that provide distribution services to book publishers, and book publishers who deal with distribution for other publishers.
Each of these 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 providers available.
Regardless of the players you consider, your RFP ought to be despatched to a minimum of 4 bidders, and it's best to permit ample time (4 months, minimal) for the complete process from RFP creation to closing vendor selection.
Protect Your Information
Earlier than you trade any info, all prospective bidders needs to be required to sign a non-disclosure agreement (NDA). The NDA mustn't only embrace prohibitions in opposition to divulging confidential monetary and operational info provided by either party, however should comprise a clause clearly prohibiting the discussion 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 main points of the effort needs to be shared only on a necessity-to-know basis. Beyond the potential anxiousness and disruption to what you are promoting, your negotiating leverage is diminished if your effort is stricken by information leaks.
Part One: Your Wants and Expectations
An RFP should have two major sections. Part 1 ought to include details about your present operations and your expectations for your enterprise over the three to five years following the transition to the third-party provider.
The latter is particularly essential—especially in the event you see your organization embracing the operational opportunities presented 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 stock becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating prices for publishers.
Part 1 also ought to include, at minimal, quantitative details for what you are promoting’ final full, fiscal year, 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 details, including number of units per invoice and number of lines per bill
Number of titles in active backlist
Number of new titles revealed annually
Examination copy volume
Common number of books in storage
Specialized service requirements, together with kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process requirements for major processes such as income and complimentary-copy order fulfillment, 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 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 Proper Questions
Part 2 of the RFP provides the prospective distribution partners with detailed questions regarding their organizations, the providers you'll 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, organization chart, client list and monetary statements.
• Operational descriptions. Request a list of critical warehouse, achievement and service processes, and written descriptions including workcirculation 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-degree standards (e.g., time in process) for critical business operations.
• Stock administration, together with physical stock 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 supply a broader range of services. These companies supply the smaller publisher a remarkable opportunity and ought to be absolutely 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 information access and reporting capabilities.
• Contingency plans, including
disaster-recovery plans for the facility and enterprise systems, and a readiness plan within the event of a pandemic flu outbreak. A surprising 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 glad clients, they're nonetheless valuable and should be completely researched.
• Price structure. Distributors typically will quote providers on a transaction foundation or as a percentage of net sales. The writer should specify the desirered pricing method, but for ease of comparing prospective costs with historical spending, the percentage 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, akin to excess returns expenses, extra stock, personalized reporting fees, 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 might be billed to you—if any—together with stock switch, data upload and another expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. You should have your authorized advisor assessment the distributor’s pattern contract.
A Service Indicator
A caretotally crafted RFP is essential to successfully evaluating the potential value of third-party distribution. The time you put money into it will likely be time well spent.
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