The RFP Process Made Simple
Each of those options has its pluses and minuses. Consider each—the broader you forged 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 despatched to a minimal of 4 bidders, and you need to enable ample time (four months, minimal) for your entire process from RFP creation to closing vendor selection.
Protect Your Information
Before you trade any data, all prospective bidders ought to be required to sign a non-disclosure agreement (NDA). The NDA should not only embody prohibitions against divulging confidential financial 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 business model is a significant step, and till the decision is finalized and a transition plan confirmed, the small print of the trouble needs to be shared only on a necessity-to-know basis. Past the potential anxiety and disruption to your enterprise, your negotiating leverage is diminished if your effort is affected by information leaks.
Part One: Your Wants and Expectations
An RFP ought to have two main sections. Section 1 should comprise details about your present operations and your expectations for your small business over the three to 5 years following the transition to the third-party provider.
The latter is particularly necessary—particularly should you see your organization embracing the operational opportunities offered by print-on-demand (POD) and short-run digital printing. As POD pricing continues to decline to near-commodity levels, printing technology improves and inventory becomes virtual, the calls for on distribution facilities will undergo dramatic change—all of which ought to translate to reduced operating prices for publishers.
Section 1 also should include, at minimum, quantitative details for your enterprise’ final full, fiscal yr, including:
Number of active clients
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 published yearly
Examination copy volume
Average number of books in storage
Specialised service necessities, including kitting, international shipments, sticker application, re-jacketing, etc.
Writer service expectations, including time-in-process necessities for major processes resembling revenue and complimentary-copy order fulfillment, returns processing, check-in and availability of incoming stock, etc.
Be Accurate and In-depth
The quality and quantity of the information 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 each 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, after all, the
The RFP should, at minimal, request the next:
• Distributor background, together with history, ownership, organization chart, consumer list and financial statements.
• Operational descriptions. Request a list of critical warehouse, success and service processes, and written descriptions including workmovement diagrams. The operations should include order intake, pick, pack and ship, customer support, invoicing, credit and collections, and processing of incoming shipments.
• Service-stage standards. Request that the distributor provide particulars of service-level standards (e.g., time in process) for critical business operations.
• Stock management, together with physical inventory processes, shrink-
control 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 offer a broader range of services. These providers supply the smaller publisher a remarkable opportunity and ought to be totally explored as part of the RFP process.
• Computer systems, together with an entire description of the hardware and business software in place, plans for any upgrades or replacement of the business systems, EDI/ONIX capabilities, client info access and reporting capabilities.
• Contingency plans, including
catastrophe-recovery plans for the facility and business 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 business continuity plans for managing via a flu epidemic.
• Customer references. While references provided by the distributor will only be from satisfied customers, they're nonetheless valuable and should be totally researched.
• Charge structure. Distributors typically will quote providers on a transaction basis or as a share of net sales. The publisher should specify the choosered pricing method, however for ease of comparing prospective prices with historical spending, the percentage of net sales technique is recommended. In addition to the bottom prices, the distributor needs to be asked to provide a detailed list of costs that are not included within the base charge, corresponding to excess returns charges, extra stock, 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 bills that can be billed to you—if any—together with stock transfer, data upload and some other expenses for which the distributor will anticipate to be reimbursed.
• Pattern contract. You should have your authorized advisor evaluate the distributor’s sample 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 can be time well spent.
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