Advantages of using EDI with NetSuite for Retailers
As a retailer, have you considered using EDI with your suppliers? EDI is not just for the big retailers. If you send many orders or large orders to your suppliers, or if your business uses drop shipping, you can reduce operational costs for both you and your suppliers by eliminating the manual labor of entering orders, shipment tracking information and invoices.
Your customers have high expectations for receiving their orders quickly, which can be difficult to achieve when your suppliers ship orders. EDI enables real time transmission of orders and order shipment notifications. The result: increasing the number of same day order shipments. Plus, receiving shipment notices in real time is especially important for drop ship orders because the notices inform retailers to send shipment notification to their customers and bill their orders.
Retailers can use either traditional EDI or develop custom solutions using standard Internet protocols. Using traditional EDI has many advantages, but there are increased ongoing costs. The advantages of traditional EDI include lower setup costs, standard transaction formats, Value Added Networks (VAN) and NetSuite partners that provide EDI integration with NetSuite. With traditional EDI, EDI partners generally charge a monthly subscription fee and a per transaction fee.
VANs provide the pipeline between a retailer’s EDI partner and their suppliers’ EDI partners. The EDI partners and VANs work together to handle the routing and tracking of the EDI transaction to insure delivery. Many of your suppliers, especially larger suppliers, may already use EDI and are connected to a VAN. This can reduce the time needed to establish an EDI connection with these suppliers.
Standard transaction formats reduce setup time and costs. EDI partners generally have predefined formats for the EDI transaction types, which can be customized to meet specific requirements. The EDI transactions types that are commonly used by retailers are: 850 Purchase Order, 855 Purchase Order Acknowledgement, 856 Shipping Notice and 810 Invoice. Retailers can also use the 210 Motor Carrier Freight Invoice Details and Invoice to receive shipment details and costs from shipping companies, like FedEx and UPS.
Another approach to EDI is a “roll your own” approach where a retailer establishes a custom connection with a supplier. Upfront costs are generally higher because custom NetSuite development may be required, but there are very low or no ongoing costs. Using this approach, retailers generally use SFTP to send and receive XML or CSV formatted files over the Internet. This approach does not provide tracking,