EDI for Wholesalers: A Complete Guide to Distribution & Compliance

In wholesale distribution, working with big retailers like Walmart and Costco is key to growing your business. Businesses that choose the right technology today will be better prepared for the future. Full-service EDI helps them process orders faster, at lower costs, and with fewer errors.

What is EDI?

EDI (Electronic Data Interchange) has been used for a long time and is a key technology for businesses to serve their customers and partners efficiently. It allows companies to exchange business documents digitally in a standard format, connecting directly through e-commerce platforms or ERP systems. EDI is popular because it provides a reliable way for businesses in any industry to communicate and share information smoothly.

How does EDI work with wholesale distributors?

EDI helps wholesale distributors automate transactions with retailers, suppliers, and logistics partners, improving efficiency and reducing manual work. For example, when a major retailer like Walmart places an order, the wholesaler receives it electronically through EDI instead of email or fax. The wholesaler then confirms receipt and processes the order. Once the products are ready to ship, an Advance Shipping Notice (ASN) is sent via EDI, providing tracking details and expected delivery time. After delivery, an electronic invoice is sent, ensuring accurate and timely payments. EDI also helps manage inventory by updating stock levels in real time, preventing shortages or overstocking. By streamlining these processes, wholesale distributors can fulfill orders faster, reduce errors, and strengthen relationships with large retailers.

How does EDI support an Omnichannel strategy?

EDI supports an omnichannel strategy by ensuring seamless communication and data exchange across multiple sales channels, including online stores, marketplaces, and physical retail locations. It helps businesses synchronize inventory, orders, and shipments in real time, reducing errors and delays. For example, if a customer orders a product online for in-store pickup, EDI updates inventory instantly, ensuring accurate stock levels. It also automates order processing, shipping notifications, and invoicing, improving efficiency and customer experience. By integrating EDI with ERP and e-commerce systems, businesses can manage operations smoothly across all channels.

Advantages of EDI in wholesale

Here are some specific ways that EDI can benefit wholesalers:

• Faster Order Processing:
Automates transactions, reducing delays and speeding up fulfillment.
• Cost Savings:
Eliminates manual paperwork, reducing administrative costs and errors.
• Improved Accuracy:
Minimizes data entry mistakes in orders, invoices, and shipping details.
• Better Inventory Management:
Provides real-time stock updates, preventing shortages and overstocking.
• Stronger Retailer Relationships:
Ensures compliance with major retailers like Walmart and Costco, improving partnerships.
• Enhanced Supply Chain Efficiency:
Streamlines communication with suppliers, warehouses, and logistics providers.
• Secure & Reliable Transactions:
Uses standardized formats for safe and consistent data exchange.
• Scalability:
Supports business growth by handling higher transaction volumes efficiently.

Frequently Used EDI Transactions for Wholesale

There are many recurring EDI transactions that are used by different industries; however, there are some transactions that wholesalers use on a regular basis. Those transactions include:

• EDI 810 (Invoice):
Sent by a wholesaler to the customer in order to bill for goods ordered and services provided
• EDI 830 (Planning Schedule/Material Release):
Sent by a wholesaler to communicate with suppliers. EDI 830 provides forecast data for upcoming orders that helps a supplier manage materials and labor to fulfill orders automatically based on the wholesaler's inventory levels
• EDI 840 (Request for Quotation):
Sent by a wholesaler to request information regarding price, delivery schedule, and any other items from sellers of goods and/or services
• EDI 850 (Purchase Order):
Sent by a wholesaler to purchase materials and/or services from a supplier. An EDI 850 is generally designed to provide information on the item, price, and quantities ordered, shipping details, payment terms, and discounts
• EDI 855 (Purchase Order Acknowledgment):
Sent by a wholesaler to confirm the successful reception of an EDI 850. The EDI 855 communicates whether the EDI 850 was accepted or rejected, or what changes may have been made to accept the order by the supplier or seller
• EDI 856 (Advanced Ship Notice):
Sent or received by wholesalers as a notice of an impending physical receipt of material or goods from a supplier. EDI 856 can also be sent by a wholesaler in response to an EDI 850, EDI 830, or EDI 862 transaction
• EDI 860 (Purchase Order Change):
Sent or received by a wholesaler to request a change to a purchase order. The EDI 860 is also utilized by buyers to confirm their acceptance of changes to a purchase order made by the original seller
• EDI 861 (Receiving Advice/Acceptance Certificate File Format):
Sent by a wholesaler to report the receipt of shipments or as a formal acceptance of returned defective items
• EDI 940 (Warehouse Shipping Schedule):
Sent to instruct remote warehouses to authorize a shipment to a buyer, such as a retailer. The EDI 940 can also be used to confirm a shipment
• EDI 943 (Warehouse Stock Transfer Shipment Advice):
Sent by a manufacturer to a remote warehouse as an advanced shipping notice of a transfer shipment that has been made from the manufacturer
• EDI 944 (Warehouse Receipt Advice):
Sent by a wholesaler to acknowledge a receipt of a shipment at the warehouse. The EDI 944 is typically sent following an EDI 943
• EDI 945 (Warehouse Shipping Advice):
Sent by a wholesaler to provide confirmation of a shipment. Wholesalers utilize EDI 945 to notify a trading partner that a shipment was made
• EDI 997 (Functional Acknowledgment):
Sent in response to an EDI 850, an EDI 997 notifies the sender that the document has arrived and was processed by the recipient

FAQs

What is EDI, and why do wholesalers need it?

EDI is a standardized method for exchanging business documents electronically. Wholesalers need EDI to efficiently communicate with suppliers, retailers, and logistics partners while reducing manual data entry errors.

What are the benefits of using EDI for wholesalers?

• Faster order processing
• Reduced errors and paperwork
• Compliance with retailer requirements
• Improved inventory management
• Cost savings on labor and materials

What should wholesalers look for in an EDI provider?

• Easy integration with existing systems
• Scalability as your business grows
• Compliance with retailer requirements
• Reliable support and customer service
• Competitive pricing

What are the costs associated with EDI for wholesalers?

Costs vary but typically include:

• Setup fees
• Monthly subscription
• Per-transaction fees (if applicable)

How do wholesalers ensure compliance with retailers?

Retailers often have strict EDI requirements (e.g., specific formats, shipping notices). Choosing an EDI provider with compliance automation helps avoid chargebacks and delays.

To learn more about how Infocon Systems can take care of your EDI needs, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.