What is EDI?

What is EDI?

In Ecommerce the best way to efficiently manage inventory and orders is through EDI or Electronic Data Integration. I like to think of EDI as one computer talking to another without messy humans getting involved. The base of EDI is a standardized messaging format that computers in different companies can automatically read and update, so that both computers are speaking to each other in the same language.

Why is EDI important for Ecommerce?

EDI makes speed possible. With digital retail, its easy to wait for each part of your company to respond to the order, but that slow pace builds into an unpleasant shopping experience for the customer. Customers expect your fulfillment to be as efficient as the glossy front end of your website. To get the different parts of your operation working efficiently they need to communicate with each other.

Traditional order processing happens over 3 – 5 days. An order is printed out, mailed to the fulfiller, and then that order receipt is included in the customer’s shipped product.

With EDI the automated that entire communication process can happen under an hour. You get your orders to the warehouse faster and they can then fulfill it immediately. EDI can be used for transferring any documents between companies and computers, but it is primarily used for order processing and shipping.

Is EDI only for your own website?

EDI doesn’t only integrate your own website’s orders to your shipping. EDI also integrates any drop shipping you have over multiple channels. If you sell on Overstock.com and Walmart Marketplace you are required to have an EDI set up.