How Native EDI Trumps Middlemen in Big Box Retail Trading

Using a software solution with native EDI (electronic data interchange) will save your company thousands of dollars in startup costs and simplify your business processes, compared to buying EDI through traditional middlemen.

How EDI is Key to Business Growth

Big trading partners can broaden a vendor’s brand presence and increase sales faster than selling through individual smaller retailers. The door to growth for many wholesalers is to land a vendor contract with a big box retail chain. The key is EDI.

EDI is a protocol for communicating vital business documents between two parties. Retail chains such as WalMart and Amazon won’t do business with you until you are EDI ready and compliant. This means vendors must transmit and receive invoices, advance shipping notices, and purchase orders according to a set policy, using the EDI protocol according to the big retailers’ guidelines.

Native EDI vs EDI Middlemen

The traditional path to big retail trading is to hire an EDI provider to set up the service, then to pay a Value Added Network (VAN) provider a subscription to maintain the network connection. The EDI and the VAN will charge for every transaction document transmitted.

Traditional EDI presents a few problems for growing companies. In some cases, it will cost $2,000 per document type (invoice, purchase order, etc) to implement EDI, and anywhere between $8,000 and $17,000 a year to maintain it, according to our research.

Significantly, traditional providers do not integrate their EDI solutions with existing business software. Thus, a company can either spend even more money to integrate EDI with their accounting or inventory management software, or deal with the time-consuming, error prone data-entry requirements of managing EDI separately from the rest of their business. Finally, it can take months for an EDI provider to implement its solution.

Business software with native EDI, by definition, integrates EDI transaction data with the rest of a company’s business, reducing risk of data processing errors and increasing efficiency. Native EDI also mean that a company will only have to deal with a single solution provider for customer support and billing, as opposed to three separate entities.

This is the case with the Cin7 inventory management solution, which can include EDI connections to a growing list of retail trading partners starting at $799 a month. Cin7 makes EDI one piece of a business’ big picture.

Learn more about how Cin7 can help your business begin to trade with big box retailers in the US, Australia, and New Zealand.