Strategically Speaking: Outsourcing Your Distribution—The RFP Process Made Simple
Part One: Your Needs and Expectations
An RFP should have two major sections. Section 1 should contain information about your existing 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 important—especially if you 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 levels, printing technology improves and inventory becomes virtual, the demands on distribution facilities will undergo dramatic change—all of which should translate to reduced operating costs for publishers.
Section 1 also should include, at minimum, quantitative details for your business’ last full, fiscal year, including:
- Number of active customers
- Number of invoices and credit memos issued annually
- Calendarized gross sales and returns—in both dollars and units
- Transaction details, including number of units per invoice and number of lines per invoice
- Number of titles in active backlist
- Number of new titles published annually
- Examination copy volume
- Average number of books in storage
- Specialized service requirements, including kitting, international shipments, sticker application, re-jacketing, etc.
- Publisher service expectations, including time-in-process requirements for major processes such as revenue 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 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 include a multiyear view of the information listed above that illustrates both historic trends and prospects for the future.
Part Two: Ask the Right Questions
Section 2 of the RFP provides the prospective distribution partners with detailed questions regarding their organizations, the services you would like them to provide and, of course, the
associated costs.
