All companies large or small that are selling products on-line or for warehouse fulfillment to big box retailers like Walmart, Sears, Kohls, Home Depot, etc. or through e-tailers like Wayfair, Overstock, Hayneedle, etc. need EDI (Electronic Data Interchange). It’s a hassle, forcing many suppliers to employ individual(s) just to coordinate it and keep it accurate.
Plus, you get to pay for the EDI documents needed. After all this technology has been around since the 1980’s so it doesn’t conform to current technologies and it’s certainly not inexpensive. For example, if you were to stream a movie on your mobile device using current EDI technology transmission cost, it would be about $240,000.
However, EDI has been around so long, and is such a core piece of a supplier’s business model, that most simply take it for granted as a necessary cost of doing business. What most people aren’t aware of is that the vast majority of big box retailers and e-tailers have evolved their infrastructure, or built it to begin with, to enable a direct connection with them. Yes, EDI is still necessary, but there is no longer a need for a 3rd party EDI company to charge for Each EDI document.
If you think about it, how many EDI documents are you processing per order? Well, for a simple drop ship order you are going to need at least five:
- Document 850 – Order Download from the Retailer (Purchase Order, Ship to Address, Items to Ship)
- Document 997 – Order Acknowledgment to the Retailer
- Document 856 – ASN to the Retailer (Advanced Shipping Notice, Tracking Information for the Items Shipped on the PO)
- Document 810 – Invoice to the Retailer
- Document 846 – Product Inventory to the Retailer.
If you multiply this by 1,000 orders per day, or even 100 orders per day, the complexity of EDI processing becomes truly significant and expensive. What’s needed is an order processing and fulfillment approach that directly connects with retailers in a 100% compliant fashion – at no cost – and automates the management of EDI documents, simplifying the entire process. This will enable suppliers to focus on their business, managing the rare order exception rather than every single order.