EDI Basics For Retailers, E-Commerce And Grocers

In this guide, you’ll learn how EDI works for retailers, grocers and e-commerce retailers. Explore why companies in the retail industry use it to help automate, improve and speed up order management and other processes. Discover the benefits of EDI for your retail or grocery business, and how it can help you work better with your trading partners.

How Does EDI Work In Retail? Why Is It Important For Today’s Retailers?

There’s a reason why more and more retailers are turning to EDI, it allows them to manage their business relationships with suppliers, vendors and distributors, and for good reason.

EDI alone eliminates the need for manual data entry, faxing, phoning and emailing about orders and transactions. Due to this, transactions are a lot faster and more accurate than any period prior. In a retail world that’s moving faster and faster, EDI is becoming vital for all retailers, e-commerce and grocers. EDI has become a pillar for effective supply chain management.

EDI is a language that’s known in many business systems and it ensures all of your trading partners and suppliers are on the same page.

Examples Of How EDI Works For Retailers, E-Commerce And Grocers

When ever you need to place an order with a supplier, you’d create an electronic purchase order the system you use. Your EDI solution then creates an EDI version of that purchase order (EDI 850) and it’s sent to the supplier.

Even though your supplier may use different technology than you, their order system is able to correctly translate and receive the information automatically, so as long as they’re EDI compliant. Nearly all of the major retailers will be EDI compliant, which ensures all transferred data is accurate.

Once your supplier receives the purchase order, they will send you an EDI code (EDI 997), which means your order was received.

When your order is ready to be shipped out, the supplier will send you an advance shipping notice (EDI 856). Next, you’re going to receive an invoice from your supplier (EDI 810) and you can check to make sure that order is accurate and you received the correct quantities (EDI 861).

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Using EDI codes is much easier than having to manually enter all this data, hence the reason EDI has become so popular over the years.

Imagine if instead of spending hours matching up paperwork, you reconciling your orders with a few keystrokes. By automating an invoice (EDI 810) match to the purchase order (EDI 850) and quantity received (EDI 861), everything is already available in your system to allow you to issue an accurate payment (EDI 820).

When it comes to receiving your products and selling them, (EDI 852) can provide data on the inventory and current products you have. It can also show how those products are selling from your POS Data.

EDI Benefits For Retailers, E-Retailers And Grocers

There’s a wide range of benefits for using EDI. EDI is the foundational pillar for automated order processing and inventory management. EDI is proven to streamline and improve workflow while enhancing supply chain predictability.

  • EDI Is Cheaper – Paper based orders can cost you upward of $50 per order or more. With EDI, you could pay as low as $1 for transactions.
  • Reducing Data Errors – Anytime you have manual data entry, errors are a concern. EDI reduces your need for manual entry and you can fully automate it.
  • Better Inventory Predicatability – EDI allows you to accurately analyze your inventory, helping you reduce stockouts, surplus, markdown, etc.
  • More Attention On Growth – With the right EDI solution, you’re going to be able to automate a lot of processes, allowing you to focus more on your growth.
  • Better Accurate Forecasting – When your data is accurate, the data used for forecasting is going to be more accurate, EDI systems are extremely accurate.
  • Responding Quicker – EDI gives you full control over on-hand inventory. If there’s ever an disruption, you can act fast with the data in hand.