EDI 101 for Today’s eCommerce Business
As the world of ecommerce has shifted away from a few bulk shipments to retailers to drop shipping small parcels for retailers directly to customers, EDI compliance has increased in both importance and cost.
What is EDI?
Electronic data interchange (EDI) provides a standard method of communicating data between businesses, also known as your EDI trading partners, with the purpose of making this data transfer more efficient and accurate. Different types of business systems that use EDI include eCommerce solutions, ERP, WMS, CMS, accounting software and many more. EDI replaces old fashioned paper and fax transactions with processes that automate and simplify.
Is EDI required to work with retailers?
According to B2Bgateway.net’s blog, the top 5 advantages of EDI include:
- Accuracy and efficiency, eliminating the need to re-key data and reducing human error to provide accurate, real time data to all parties;
- Integration of all aspects of your supply chain;
- Quicker order and transaction processing;
- Faster payments with shorter order to payment cash cycles, allowing your business to get paid much faster from your customers;
- And, environmentally friendly, since all communications are electronic.
The most impactful benefit of EDI to your eCommerce business is EDI compliance; an expectation that is quickly being adopted by many retail partners to increase accuracy of data as well as maintain their brand reputation and customer experience.
Of the over 100 major retailers that currently partner with OPAL, less than 5% require the use of a 3rd party EDI Company. This percentage continues to drop as retailers recognize software solutions that are more comprehensive; similar to OPAL’s 4-in-1 solution that includes EDI for eCommerce businesses to simplify the need for multiple software systems, as well as reduce overhead costs.
How does EDI work?
EDI transaction files contain data and pertinent information in a standardized format unique to its purpose. For example, it may contain who’s the carrier, what/ how many/ when items are shipping, and how they will be transported.
EDI providers, including VANs (Value Add Network), integrate with ERP / Accounting software to process orders between your eCommerce business and your sales channels, making your transactions EDI compliant with them.
Did you know OPAL eliminates the need for a third-party vendor?
Simplify with OPAL’s 4-in-1 software solution, your solution for EDI, order management, warehouse management and shipping needs. OPAL connects to all retailers, suppliers and warehouses without the need for third-party document charges, allowing your eCommerce business to focus on how efficiently your team can pick, pack and ship.
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