Scroll Top

4 Things to Know Before Getting Started with EDI

Getting started with EDI

It’s natural for businesses to search for opportunities to cut costs and improve transaction times. Incorporating an advanced electronic data interchange (or EDI) software into your business’ transaction platform can accomplish exactly that. As a fully automated software, EDI helps businesses to develop and easily maintain relationships with retailers. Read on to learn more about electronic data interchange, and what you should know before integrating it into your business.


1. Learn the Basic EDI Terms

Because EDI performs a sophisticated and nuanced function for each business, there are a few complex terms associated with it. Before involving electronic data interchange in your company’s strategy, it’s important to understand these terms. With this knowledge, you can build a transaction automation strategy that is right for your business.

  1. Electronic data interchange: EDI. The technique for businesses to exchange common business transactions in a coded form.
  2. Enhanced EDI: A more robust and versatile system than basic EDI, enhanced EDI offers businesses more capabilities.
  3. Custom EDI Integration: Sharing EDI transactions with other business systems, like accounting and shipping.
  4. Compliance: Adherence to the retailer’s unique requirements for electronic trading.
  5. Mapping: Converting EDI transactions from a coded form into usable documents.
  6. D2C: Direct to Customer Shipping. This model allows for businesses to easily ship merchandise to online customers. With this system, retailers have minimal involvement, acting only as a distribution network.
  7. Inventory reconciliation: The process through which retailers and manufacturers compare inventory counts, and come to an agreement.
  8. Consignment: A system in which retailers pay manufacturers for merchandise only after selling it.


With an understanding of the terminology surrounding electronic data interchange, you can maximize its potential within your company.


2. Know Your Trading Partners

As an established manufacturer, you likely already have some existing retailer relationships. Electronic data interchange can help you to refine these relationships by augmenting the transaction process. But, this only works if you configure your EDI software to their specifications.

When you first integrate your electronic data interchange software, you should strongly consider your primary trading partners. Tailoring your EDI system to align with the compliance specifications of these existing trading partners should be your first step.

For example, various retailers have different needs when it comes to restocking. Some stores may want to restock on a routine basis, regardless of inventory levels. Others may want to simply replenish inventory as it is depleted.

Another common retailer specification is invoice format. Based on a retailer’s internal invoicing procedures, the way that they generate invoices may be different than other retailers you regularly sell to. Understanding these differences– which are often subtle– will help keep them satisfied, and maintain a positive relationship.

Taking these individual retailers into account will help you to configure an EDI solution that will truly benefit your organization.


3. Design EDI Software Based on Business Needs

Not all electronic data interchange platforms operate in the same fashion. In fact, it may be difficult to find even two electronic data interchange platforms that have precisely the same functions or configurations.

When manufacturers set up a new EDI platform, it’s important to consider the different features that would help your business.

You should ensure that you take your organization’s logistics into account. EDI software allows businesses to create packing lists, branded packing tape and more with shipping integrations. The same goes for EDI accounting integrations. But, with an external warehouse system, your shipping needs may be more complicated.

Custom EDI software will help you to find a tool that can successfully and seamlessly ship to customers.


4. Find the Right EDI Company

Basic EDI software is not the proper solution for many organizations. To truly excel and beat the competition in your industry, you need a way to eliminate the time that it takes to conduct each transaction.


Get Started with EDI Options

At EDI Options, we have helped many businesses to refine their relationships with retailers. By configuring a custom electronic data interchange platform, we will help your business to incorporate features specific to your industry and business model. To create a unique and fully functional EDI platform, contact us today.