You got through the door to pitch your great products to one of the large retailers, they loved your products, you agreed a price, but then suddenly they asked about EDI. Without EDI you can’t be a supplier to them, but if you get it set up they’re ready to go. This is the experience many small companies have when they try to take their products to the next level. So what EDI solutions are available for small suppliers? Are the costs too much of a barrier for a small business to supply a large retailer?
What are EDI Solutions?
EDI is electronic data interchange, so basically it’s a way of your retail customer ordering products from you and going through the billing and payment process by electronically exchanging data. This has greatly cut down their requirements for large admin and accounting teams to send and receive order and accounting paperwork. All manual data entry is gone, and all data is interchanged via the EDI software. This certainly helps them with their profit margin, and also helps with order turnaround, because a process that once took days to be processed now happens within seconds, and they can have their ordered products at their warehouse or retail store the very next day if they wish. No problems with out of stock items anymore.
The EDI Software Options
There are two routes with EDI software, either Web EDI or Internet- based EDI. Web based EDI is SaaS software hosted on a browser, whereas Internet EDI is purchased off the shelf software hosted on your own servers.
The advantages and disadvantages of these systems follow the usual arguments for and against SaaS software. Web EDI is easy low cost entry, with a monthly subscription cost. You don’t have to worry about security, you don’t have to buy and maintain servers and a server room, and you can run the software from any device anywhere. The software is maintained and updated by the software vendor, to ensure compliance with regulatory concerns and with your customer’s EDI systems. However for higher levels of data exchange costs can escalate, and you are heavily reliant on your software provider long term.
Inter based EDI although costly on entry can work out cheaper in the long run, and gives you absolute control over your data. You can integrate bespoke systems into the software to link your ERP systems, accounting software and other systems core to your business.
Other Advantages of EDI Solutions
EDI advantages aren’t limited to just complying with your customer. You will gain a much better control over your ordering management as well as inventory management. You too will cut costs on admin, by reducing data entry and accounts handling work. It will also give you access to other large customers who require EDI, and you’ll already be set up so integration with them will be a lot smoother and faster. Run the EDI solution through to your suppliers as well as your whole system can be automated.