The RFP Process Made Simple

Step one within the RFP process is to determine the businesses you wish to consider as potential bidders for your distribution business. You might have, essentially, options: specialist firms that provide distribution services to book publishers, and book publishers who deal with distribution for different publishers.

Every of those 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 companies available.

Regardless of the players you consider, your RFP needs to be despatched to a minimum of 4 bidders, and it is best to enable ample time (four months, minimum) for your entire process from RFP creation to final vendor selection.

Protect Your Information
Earlier than you alternate any info, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA shouldn't only include prohibitions against divulging confidential monetary and operational data provided by either party, however ought to 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 small print of the effort should be shared only on a need-to-know basis. Beyond the potential nervousness and disruption to your small business, your negotiating leverage is diminished in case your effort is affected by information leaks.

Part One: Your Needs and Expectations
An RFP should have two major sections. Part 1 ought to include information about your existing operations and your expectations for what you are promoting over the three to 5 years following the transition to the third-party provider.

The latter is particularly necessary—particularly when you see your organization embracing the operational opportunities introduced by print-on-demand (POD) and short-run digital printing. As POD pricing continues to say no to close-commodity ranges, 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.

Section 1 additionally should include, at minimum, quantitative particulars for your corporation’ final full, fiscal year, together with:

Number of active customers
Number of invoices and credit memos issued annually
Calendarized gross sales and returns—in each dollars and units
Transaction particulars, together with number of units per bill and number of lines per bill
Number of titles in active backlist
Number of new titles printed yearly
Examination copy quantity
Average number of books in storage
Specialized service necessities, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, together with time-in-process necessities for main processes resembling revenue and complimentary-copy order achievement, returns processing, check-in and availability of incoming stock, etc.
Be Accurate and In-depth
The quality and quantity of the data you provide will have a direct bearing on the accuracy of the bid and the quality of the working relationship between you and your distribution partner. It is a good idea to incorporate a multiyear view of the data listed above that illustrates both historic traits 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 companies you would like them to provide and, of course, the
associated costs.

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

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

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

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

• Inventory management, including 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 services provide the smaller writer a remarkable opportunity and ought to be fully explored as part of the comprehensive rfp generation process.

• Computer systems, together with a complete 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, together with
disaster-recovery plans for the facility and enterprise systems, and a readiness plan in the event of a pandemic flu outbreak. A surprising number of publishers have asked their suppliers to provide their business continuity plans for managing by means of a flu epidemic.

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

• Payment structure. Distributors typically will quote providers on a transaction basis or as a percentage of net sales. The writer should specify the desirered pricing technique, however for ease of evaluating prospective costs with historical spending, the proportion of net sales methodology is recommended. In addition to the base prices, the distributor should be asked to provide a detailed list of costs that are not included within the base payment, resembling excess returns prices, excess inventory, personalized reporting charges, etc.

• Transition costs. The move out of your current distributor to your new provider is not going to be without costs. The distributor needs to be asked to provide an estimate of the transition expenses that will probably be billed to you—if any—together with stock switch, data upload and every other bills for which the distributor will expect to be reimbursed.

• Pattern contract. It is best to have your authorized 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 can be time well spent.