For many inventors, the idea of learning a new software program and a new process is daunting. Somehow, the EDI (Electronic Data Interchange) requirement by a retailer seems like just another hurtle in the market process. Understanding why EDI is required by most major retailers and the potential benefits may quell some of the panic.
What is EDI?
Welcome to the paperless world where retailers don’t use paper, faxed or telephone orders. Instead they use Electronic Data Interchange (EDI) to exchange business documents (purchase orders, invoices, shipping and tracking info, etc.) in a standardized electronic format with you. Each retailer has a different set of EDI requirements that they’ll provide in a Vendor or Compliance Guide for you.
Knowing the retailer’s EDI requirements upfront will help you negotiate price, maintain your margins and plan for personnel, resources, equipment and time.
Vendor Benefits to EDI
While you may not be happy about using EDI, there are some very attractive benefits:
- Save money by cutting processing and tracking time, paper, printing, ink, filing, storage, transactional errors
- Save time by exchanging transactions with your trading partners in seconds instead of days
- Reduce errors by adhering to compliance rules
- Improve cash flow with real time transactions
- Improve inventory tracking
- Reduce order cancellations and out-of-stocks
- Enhance sustainability and responsibility
Be EDI-capable and EDI-smart!
EDI shipping, packing and compliance rules can chew up profits. Asking smart questions about EDI when you meet with buyers will help you create a profitable pricing and fulfillment strategy. Remember, the buyer’s job is to get your product in their stores for the lowest price possible while requiring you to comply with their standardized process.
- Where will you be shipping your products?
- Will your product be shipped to the store or to a distribution center? Multiple stores or DCs? A combination?
- Will you be part of a ‘drop ship’ program?
- What determines success? Understand the retailer’s ‘scorecard’. What is the next step or level of selling or rollout?
- Has the retailer assigned your company a vendor #?
- Does the retailer require a catalog setup?
- Does the retailer have a preferred EDI provider?
- What is the retailer’s timeline for having your product in store and/or online?
- What are the retailer’s packing, carton, label and insert requirements?
- How will the retailer be evaluating your performance?
- Does the retailer have a preferred shipper?
- Do your products require UPC codes or RFID labels?
- What is cause for a chargeback?
- How quickly do you need to fulfill each order?
- What are the retailer’s stocking requirements?
Believe it or not, the answers to all of these questions will help you make an informed decision about implementing EDI. And you’ll look pretty savvy when you meet with the buyer.
EDI Preparation List
Today, EDI is primarily cloud-based so you’ll be able to log in to process your orders, invoices and additional virtual paperwork as often as needed. Ensuring that you are ready to take the EDI plunge after the pricing and timeline have been determined is another step in readiness.
- An internet-enabled computer (Mac or PC)
- Product UPC or EAN codes
- A dedicated person who will be the “EDI guy”
- A laser or thermal printer
Now, when your retailer asks, “Are you EDI-capable?” say, “Yes”!
If you are in the market for EDI or unhappy with your current provider, we invite you contact Inventorz Networks’ order management Expert Member: eZCom Software. As a longtime Inventorz Network supporter, eZCom’s powerful, cloud-based Lingo™ EDI solution simplifies and speeds the trading process while ensuring compliance with retailers. Their team will walk you through initial implementation and testing to fully-scalable expansion, and give award-winning customer support every step of the way. Lingo can fulfill your EDI requirements and grow with your company and trading partners. Adele Rosenblum (201-731-1801 direct or [email protected]) has worked with many Inventorz Network members. Ask her for an introductory demo, retailer information or an assessment of your EDI needs.