EDI may sound like something for large retailers with many stores, high order volumes and complex systems. But small retailers can also benefit from EDI. Especially if you regularly work with suppliers and process a lot of orders and product data.
You may still be working perfectly fine without EDI. You receive an order confirmation by email, enter the order into your system and process the packing slip and invoice later. It works. But as you work with more suppliers, products and orders, this way of working takes up more and more time.
And this is where EDI comes in. EDI stands for Electronic Data Interchange and enables businesses to exchange B2B data automatically. But what does that actually mean for you as a small retailer?
Electronic Data Interchange meaning: what is EDI?
The term Electronic Data Interchange may sound complicated, but the idea is actually very simple. EDI allows businesses to exchange data automatically with each oth
Imagine you order clothing, shoes or sports products from a supplier. Without EDI, you may have to enter the order manually, receive an order confirmation by email, and later process the packing slip and invoice again.
With an EDI connection, this can all happen automatically. The order is sent from your system to the supplier. The supplier can then send back an order confirmation, packing slip or invoice. The information is automatically processed in the right system.
It’s about much more than just orders. For example:
- Product numbers
- Prices
- Sizes and colours
- Barcodes
- orders
- Order confirmations
- Packing slips
- Invoices
- Stock and sales data
In short: EDI allows systems to communicate with each other, without you having to manually enter data every time.
EDI for small retailers: when do you need it?
Maybe you’re thinking: but I’m not a large retailer at all. Why would I need EDI?
A good question. You don’t automatically need EDI just because you’re a retailer. It becomes especially useful when you notice that you’re spending more and more time processing data between your store and your suppliers.
So it’s not just about the size of your business. It’s mainly about how you work.
Do you work with multiple suppliers? Do you have a large product range with many different sizes and colours? Or do you place orders regularly? Then an EDI system can take a lot of manual work off your hands.
Do you recognize these situations?
Maybe a supplier sends you an Excel file with new products. You then have to enter all the products into your system yourself. Or you receive an order confirmation by email and manually check that everything is correct. You may also receive a packing slip and invoice and have to process this information again.
Individually, these may seem like small tasks. But if you do this every week for multiple suppliers, the time quickly adds up.
EDI automates precisely these kinds of repetitive tasks.
EDI connection: how does it work for a retailer?
An EDI connection connects your system to your supplier’s system. That may sound technical, but you don’t need any technical knowledge of EDI yourself.
You can think of it as a translation tool that allows different systems to understand the same information.
Your store may use a particular ERP system, while your supplier uses a completely different system. That doesn’t have to be a problem. With EDI, these systems can still communicate with each other.
From order to invoice
Imagine you place an order with a supplier.
1. You place an order
You create the order in your own system. The order is sent to your supplier via EDI.
2. Your supplier receives the order
The order is automatically added to the supplier’s system. There is no need to enter it manually.
3. You receive an order confirmation
The supplier can then automatically send an order confirmation back to you.
4. Your order is delivered
When the order is delivered, the supplier can send a digital packing slip. This shows you which products and quantities have been delivered.
5. The invoice follows
The invoice can also be exchanged digitally and processed automatically.
This turns a process that would normally involve multiple emails, files and manual tasks into a much simpler process.
EDI orders: less manual work when placing orders
Orders are an important part of EDI. If you regularly place orders with suppliers, you know how many steps can be involved.
Creating an order, sending it, checking it, processing the order confirmation and eventually checking the delivery. When you do this for multiple suppliers, it can take up quite a bit of time.
With EDI orders, orders can be exchanged automatically between your system and your supplier’s system.
You no longer have to take an order out of your system, copy it into an email and then wait for your supplier to process it. The order is sent digitally and can be processed directly in your supplier’s system.
Less manual data entry means fewer steps and less chance of errors.
Product data management: keep your product data up to date automatically
As a retailer, you probably have more product data than you might think.
For example, a clothing item has a product number, brand, price, size, colour and barcode. A supplier may also provide all kinds of additional information.
When you have to enter all this data manually, product data management can take a lot of time.
With EDI, a supplier can exchange this product data with you automatically. New products, for example, can be processed directly in your system.
From product numbers to barcodes
Think about:
- Product numbers
- Prices
- Sizes
- Colours
- Barcodes
- Product information
From product numbers to barcodes
This is especially useful when your product range changes regularly or when you work with multiple suppliers.
Good product data also form the basis for a smooth ordering process.
EDI software: is it really that complicated?
This may be one of the biggest barriers for a small retailer. The term EDI software sounds technical. You might therefore think: this must be complicated, expensive and mainly intended for large companies.
But you don’t have to become an EDI expert yourself.
The EDI software handles the technical work in the background. The most important thing for you is that your system and your supplier’s system can communicate with each other.
You can simply continue working with your own system. The EDI solution makes sure that the data is exchanged in the right way.
Think of it as a translator. You speak your own “system language” and your supplier may speak another. EDI makes sure that both systems can understand each other.
ERP integration: what does it mean for my store?
Many retailers use an ERP system, point-of-sale system or other software to process orders and product data. You may be wondering if you need a completely new system to work with EDI.
You don’t.
ERP integration is about connecting your existing system with other systems. This allows data to be exchanged automatically between them.
So you don’t have to completely change the way you work. The goal of an EDI connection is to make your existing processes simpler and more efficient.
What are the benefits of EDI for a small retailer?
Ultimately, it’s not really about the technology. You want to know what EDI actually does for you.
Less manual work
You no longer have to manually enter orders and product data as often. This saves time, especially when you work with multiple suppliers.
Fewer errors
Every time you manually enter data, something can go wrong. An incorrect product number, price or quantity can lead to extra work later. By exchanging data automatically, there are fewer moments when you need to enter information yourself.
Work faster
An order can be sent directly from your system to your supplier. An order confirmation, packing slip or invoice can also be sent back automatically. This means fewer steps are needed.
Better product data management
Your product data stays organised more easily. New products, prices, sizes, colours and barcodes can be processed automatically.
More time for your store
Perhaps the most important benefit: you spend less time on administration. Instead of constantly entering and checking data, you have more time for your customers, your product range and your store.
Is EDI also useful if you only have a few suppliers?
Not every small retailer has the same needs. If you have few orders and can process everything without much manual work, the time savings from EDI may be limited. But when you notice that you’re spending more and more time on orders, product data and administration, it may be worth looking at what automation could do for you. Even if you only have a few suppliers today, that may change in the future. Your product range grows, you add new brands and the number of orders increases. With good system integration, you can prevent your administration from growing at the same pace as your store.
EDI doesn’t have to become relevant only when you are a large retailer. It can help you grow without continuously adding more manual work.
EDI for retailers: start small
EDI doesn’t mean you have to change your entire business overnight.
The first step is simple: take a look at how you currently work.
Where do you enter a lot of data manually? What information do you receive from suppliers every week? Which orders, packing slips or invoices take a lot of time to process?
From there, you can look at which EDI connection fits your system and the way you work.
At FUeB, we connect retailers, suppliers and systems. This allows businesses to easily exchange orders, product data and other B2B data.
Curious whether EDI is right for your store?
Discover what EDI can do for your store and how much manual work you could save.