Step one within the RFP process is to establish the businesses you want to consider as potential bidders for your distribution business. You could have, essentially, two options: specialist companies that provide distribution companies to book publishers, and book publishers who handle distribution for different publishers.

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

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

Protect Your Information
Earlier than you exchange any data, all prospective bidders should be required to sign a non-disclosure agreement (NDA). The NDA mustn't only embody prohibitions against divulging confidential financial and operational information provided by either party, but should comprise a clause clearly prohibiting the discussion of the RFP with unauthorized parties within the publisher’s organization. Moving to a third-party distribution business model is a significant step, and until the decision is finalized and a transition plan confirmed, the main points of the hassle ought to be shared only on a need-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 info leaks.

Part One: Your Needs and Expectations
An RFP ought to have two major sections. Section 1 should contain details about your current 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 important—particularly when you see your group embracing the operational opportunities offered by print-on-demand (POD) and brief-run digital printing. As POD pricing continues to decline to close-commodity ranges, printing technology improves and stock 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 additionally should embrace, at minimum, quantitative details for your online business’ last full, fiscal 12 months, 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 published yearly
Examination copy quantity
Common number of books in storage
Specialized service requirements, including kitting, worldwide shipments, sticker application, re-jacketing, etc.
Publisher service expectations, including time-in-process requirements for main processes akin to income 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 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 is 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 Right Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions concerning their organizations, the companies you'd like them to provide and, in fact, the
associated costs.

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

• Distributor background, including history, ownership, group chart, shopper list and financial statements.

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

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

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

• Digital services. A number of major distributors have established strategic alliances with POD specialists, digital asset administration service providers and e-book distributors to supply a broader range of services. These providers provide the smaller writer a remarkable opportunity and must be fully 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 business systems, EDI/ONIX capabilities, shopper information access and reporting capabilities.

• Contingency plans, including
catastrophe-recovery plans for the facility and business systems, and a readiness plan within the event of a pandemic flu outbreak. A stunning number of publishers have asked their suppliers to provide their enterprise continuity plans for managing by means of a flu epidemic.

• Customer references. While references provided by the distributor will only be from glad prospects, they're nonetheless valuable and needs to be completely researched.

• Fee structure. Distributors typically will quote services on a transaction basis or as a percentage of net sales. The writer should specify the favorred pricing method, but for ease of evaluating prospective costs with historical spending, the share of net sales technique is recommended. In addition to the bottom prices, the distributor needs to be asked to provide an in depth list of prices that aren't included in the base fee, such as excess returns fees, excess stock, personalized reporting fees, etc.

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

• Sample contract. You should have your authorized advisor review the distributor’s pattern contract.

A Service Indicator
A caretotally crafted RFP is essential to effectively evaluating the potential value of third-party distribution. The time you put money into it shall be time well spent.

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