What is EDI? A supplier’s guide to navigating document exchange

by | Sep 6, 2024 | Order Fulfillment, Order Management, Retailer Requirements, Suppliers

Congratulations on catching the interest of a buyer who wants your product! Breaking into the retail market can be daunting for emerging brands, especially if you’ve been primarily focused on direct-to-consumer (D2C) channels. As you sift through the vendor agreement, you may encounter a crucial question: “Are you EDI compliant?”

This question can be intimidating, leaving you scrambling to understand what EDI is, when you need it and how much it costs.

Feeling overwhelmed? Fear not! This blog will demystify EDI and show how it can be a game-changer for your startup, helping you scale your supply chain as you grow.

What is EDI?

Electronic data interchange, or EDI, is the electronic way to receive orders, manage inventory, communicate shipments and process invoices, replacing the manual methods many emerging brands start with. EDI speeds up getting products on shelves by allowing purchase orders (POs) to be sent electronically.

Order confirmations are also sent electronically, helping buyers understand what will be fulfilled and allow them to plan accordingly. Advanced Shipping Notices (ASNs) inform retailers when and how products will arrive, enabling distribution centers to receive shipments smoothly without manual sorting. This data integration ensures efficient operations, timely replenishments and maximized sales opportunities.

Benefits of EDI for emerging brands

You might think EDI is only for big brands with large supply chains, but that’s not the case. Even if your volume with a retailer is small, EDI is warranted.

By leveraging EDI, your brand can streamline supply chain operations, ensuring your products are always available when retailers and consumers need them. Here are some key benefits:

  • Streamlined communication: Better collaboration with your retail and distribution partners enhances communication throughout your supply chain.
  • Faster payment: EDI invoicing accelerates payment processing.
  • Maximized sales opportunities: An increased ability to seize both existing and new relationships helps boost sales.
  • Reduced costs: More efficient operations lower overall expenses.

This efficiency not only improves your workflow but also boosts your brand’s reliability and profitability in a competitive market.

How to get started with EDI

EDI solutions are more accessible than ever for emerging brands, thanks to cloud technology and full-service providers. These providers equip you with all the necessary people, processes and technology so you can confidently say “yes” to EDI—without needing to learn how to code or hire additional staff.

Simply choose a reputable full-service provider like SPS Commerce, who will prescribe the plan you need, configure the solution, validate it and manage any ongoing changes. This allows you to focus on building your brand while they handle the complexities of EDI.

Breaking into the retail market is both exciting and challenging, and EDI isn’t a big, scary thing that will cause you headaches. With the right provider, implementing EDI can simplify your operations and scale your business, allowing you to focus on what’s important—selling the products your consumers love.

Emily Curran
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