The RFP Process Made Simple

The first step in the RFP process is to establish the companies you want to consider as potential bidders to your distribution business. You will have, essentially, two options: specialist corporations that provide distribution services 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 companies available.

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

Protect Your Info
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 financial and operational information provided by either party, however 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 decision is finalized and a transition plan confirmed, the details of the trouble should be shared only on a necessity-to-know basis. Beyond the potential anxiousness and disruption to your business, your negotiating leverage is diminished in case your effort is tormented by info leaks.

Part One: Your Wants and Expectations
An RFP ought to have major sections. Part 1 ought to comprise details about your present 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 necessary—particularly if you happen to see your organization embracing the operational opportunities presented by print-on-demand (POD) and short-run digital printing. As POD pricing continues to decline to near-commodity ranges, printing technology improves and inventory turns into virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced working prices for publishers.

Section 1 also should embody, at minimal, quantitative details for your corporation’ final full, fiscal yr, together with:

Number of active customers
Number of invoices and credit memos issued yearly
Calendarized gross sales and returns—in both dollars and units
Transaction particulars, together with number of units per invoice and number of lines per bill
Number of titles in active backlist
Number of new titles revealed yearly
Examination copy volume
Average number of books in storage
Specialised service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Writer service expectations, together with time-in-process requirements for major processes similar to 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 data 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 suggestion 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
Section 2 of the rfp distribution and tracking provides the prospective distribution partners with detailed questions concerning their organizations, the companies you'd like them to provide and, of course, the
associated costs.

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

• Distributor background, together with history, ownership, organization chart, consumer list and financial statements.

• Operational descriptions. Request a list of critical warehouse, success and repair processes, and written descriptions including workstream diagrams. The operations should include 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 stock processes, shrink-
control procedures, back-order reporting and administration, and audit controls.

• Digital services. A number of main 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 providers offer the smaller writer a remarkable opportunity and should be absolutely 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 info access and reporting capabilities.

• Contingency plans, together with
disaster-recovery plans for the facility and business systems, and a readiness plan within the occasion of a pandemic flu outbreak. A shocking number of publishers have asked their suppliers to provide their business continuity plans for managing by a flu epidemic.

• Buyer references. While references provided by the distributor will only be from happy customers, they're nonetheless valuable and ought to be completely researched.

• Charge structure. Distributors typically will quote services on a transaction foundation or as a proportion of net sales. The publisher ought to specify the choosered pricing technique, but for ease of evaluating prospective prices with historical spending, the proportion of net sales methodology is recommended. In addition to the base costs, the distributor must be asked to provide an in depth list of prices that are not included within the base payment, equivalent to excess returns prices, excess inventory, personalized 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 expenses that shall be billed to you—if any—together with inventory switch, data upload and some other bills for which the distributor will expect to be reimbursed.

• Pattern contract. You need to have your legal 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 spend money on it might be time well spent.