edi for ecommerce

Technology is a constantly evolving web of techniques, processes, and mechanisms to offer consumers better efficiency. Sometimes, it’s also just for fun.

As a software company in the ecommerce space, we aim to evolve continuously as well, both through our aggressive development timeline and our own knowledge (and creation) of emerging technologies. Our goal is to maintain an agile momentum of growth based on our customers’ exact business needs to stay ahead of what is happening next.

We’ve been presented with some questions regarding EDI – a rather new term for people without a computer science degree and newer to the tech scene.


So, what is EDI?

EDI (or electronic data interchange) is an expedited method of communication between businesses. A simple definition from EDI Basics is;

“A computer-to-computer exchange of business documents in a standard electronic format between business partners.”

In layman’s terms, this means that your computer can communicate with suppliers and other businesses quickly and automatically, without needing your intervention. You know how you may gather around the water cooler at work to chat with peers? EDI allows your computer to talk with other computers in a standardized and automated way, speaking the same language.


What are the benefits of EDI?

The benefits of EDI systems that electronically exchange your business data include

  • better processing speed
  • fewer errors
  • reduced costs of labor

As EDI Basics explains, EDI involves a three part process.

To quote the definition, this is how computer-to-computer exchange works: EDI documents travel directly to the appropriate application on the receiver’s computer. There is no human involvement in this process, which saves time as well as reduces error.

The business documents and data transferred include any information you might exchange with your business partners, such as purchase orders, invoices, advance ship notices, inventory documents, shipping status documents, and payment documents.

EDI Basics provided these diagrammed examples to demonstrate the difference between manual and EDI data transfers.

How EDI systems work

Below is how businesses may send a purchase order, without the automation of an EDI system.

The manual data processes that EDI systems replace


So, what is an API and how is it different from EDI?

So, an API (or Application Programming Interface) is another expedited exchange of business data. It offers a great way for software companies to talk to one another without any human intervention. Where EDI has been around since the 1970s, API is the new kid on the block with most companies incorporating the method since the 2000s.

As you would imagine, the benefits for using API are the same as using EDI. It makes for a faster processing speed, reduced labor, and less human errors. The benefit of using an API is that the implementation isn’t as expensive and it usually easier to accomplish. EDI usually requires daily maintenance


Is this how ecomdash works?

This is similar (but not the same) to how ecomdash handles order management functions. For example, our software will ask eBay (or any other sales channel we’ve connected with) for new sales orders via an API.

Once ecomdash obtains the sales order and, based on a customer’s settings, we will add the sales order detail to a file within an FTP site, or allow fulfillment centers and suppliers to access it via our open API.

The warehouse will process the sales orders and ship the items. Then, the warehouse will send the tracking information via FTP or our open API. Ecomdash will receive that data and update the shipping details and order status on eBay.

So, it’s still a completely automated process; it’s just that EDI technology uses standard document protocols whereas ecomdash is more flexible to allow for deviations in the document formatting and delivery.

Many small and mid-sized businesses need that flexibility in their workflow and data transfer processes.

Though ecomdash automates most of the process of communicating back and forth with suppliers, warehouses and manufacturers, we do not work offer EDI connections. EDI is for connectivity only, whereas a software like ours can operate as more of an ERP system (enterprise resource planning) – meaning ecomdash handles management and functions of operating an ecommerce business overall. Where EDI focuses on standardized data communication methods, ecomdash and other ERP systems will re-format the data in a more customized way based on your business needs.

We intend to provide customers with the greatest efficiency and simplicity when it comes to running an ecommerce business, which does mean greater automation of processes down the line. To try our robust inventory management software for free, sign up for a free trial today.

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