6 reasons why every Amazon seller should invest in EDI

Here’s how EDI can turn SME brands’ and manufacturers’ dreams of Amazon success into lucrative reality

Transalis is an Amazon commended EDI provider

EDI guarantees an effortless flow of electronic documents between suppliers, vendors and customers within the Amazon trading network

Fast and accurate order fulfilment are key ingredients for any SME hoping to succeed on Amazon, regardless of whether they take the Vendor Central or Seller Central route. EDI achieves this by seamlessly integrating with vendors’ existing systems (such as ERP), enabling them to automatically handle both inbound orders from Amazon and outbound tracking information for customers, maximising the growth potential Amazon offers.

It also automates the computer-to-computer transmission of wider supply chain documents including purchase orders, invoices, bills of lading, shipping information and inventory documents. Thanks to cloud-based EDI software this exchange of digital documents can be achieved quickly and seamlessly with little or no human intervention.

Below we outline six key ways cloud-based EDI can help you deliver a prime performance on Amazon:

Amazon EDI documentation eliminates human error

Every time humans ‘touch’ a document there is the danger of a mistake being made. That’s true no matter how diligent or careful employees may be. In fact, studies suggest that up to 5% of all manually entered invoice data is typed incorrectly.

Now imagine if 5% of all your hard-won Amazon orders were being undermined by human error. Maybe incorrect re-keying of Amazon trading documents meant shipments were being dispatched to the wrong address, products were being muddled up or refunds were incorrect. Can your business really afford to pay the price of human error?

Now consider the step-change in accuracy delivered by Amazon EDI integration. Rather than relying on labour-intensive and error-prone re-keying of information, cloud-based EDI lets your computer systems talk directly to Amazon’s computer systems as well as those belonging to your supply chain partners. This means human intervention, and costly mistakes, are removed from the process in one fell swoop.

Find out more: The cost of human error in your supply chain

Amazon EDI integration gives you closer control of your supply chains

It’s widely accepted that Amazon is as much a data business as a retail marketplace. The platform collects huge amounts of information about its customers and suppliers and consequently knows them like the back of Jeff Bezo’s hand.

Now integrated EDI can help SMEs take a leaf out of Amazon’s book. By enabling your computer systems to talk directly to your trading network’s computer systems, EDI unleashes a rich flow of highly accurate, real-time data, which gives you a golden opportunity to take greater control of your supply chains.

For instance, it can highlight late or incomplete orders much faster than conventional email and Excel processes. And if suppliers are significantly underperforming, supply chain EDI can help you find and onboard a new trading partner in a fraction of the time.

Rich EDI-powered data can also reveal previously invisible trends in customer buying habits, such as product demand spikes, much earlier in the cycle. Spotting a new trend in real-time enables you to gear-up your supply chains and analyse your progress in real-time. It’s this kind of customer analysis and supply chain agility that gives vendors a significant edge on Amazon.

More reading: 7 reasons to use EDI to control and connect your supply chain

Keep a close track on your inventory with EDI

The speed and accuracy of EDI means that Amazon sellers benefit from a real-time view of their inventory. They can see which products are in stock right now, and which items need to be urgently replenished. EDI users can also look further back into their supply chains to see which products are on order and their exact status, for example, whether they’re on order or if they are aboard an inbound shipment. The Amazon value proposition is all about speed, convenience and reliability, so the ability to keep close track of your inventory, protect availability and deliver on your promise to customers is essential.

Save time on admin and reduce costs

One of Amazon’s greatest selling points is that it enables consumers to shop around for the best price among scores of similar products. This means that profit margins are often slim, so vendors must ensure their operation is as cost-effective as possible.

EDI ensures documents are processed quickly and accurately, ensuring orders are right first time, every time with minimum human intervention and triggering fewer stock-outs and incorrect orders. Thanks to supply chain EDI, shorter processing and delivery times can enable you to reduce your stock levels and even switch to more cost-effective ‘lean’ or ‘just-in-time’ supply chain models.

This increased agility also ensures you can take greater advantage of discounts and improved payment terms.

EDI helps ensure a high-quality customer experience and protects your brand

Ratings and reviews are the lifeblood of the Amazon ecosystem. Even a handful of negative comments can tarnish your Amazon operation and discourage potential customers. EDI-powered Amazon order integration automates the high-volume back-office processes that ensure your operation runs on rails and your customers keep coming back for more.

The digital documents that power Amazon EDI

Amazon works with dozens of standardised EDI documents, including EDI 855 order confirmations, EDI 856 advance shipment notices, EDI 810 invoices to customers, EDI 753 routing requests and EDI 860 order change notifications. Sending and receiving these documents in the correct format removes the risk of missed payments, wrong dates or amounts, and other misinterpretations that come with manual re-keying.

EDI across Vendor Central, Seller Central and Direct Fulfilment

Amazon offers three main partnership models for vendors, and EDI plays a different role in each. Vendor Central, where manufacturers sell products in bulk to Amazon, makes EDI compulsory so that partners can ship to distribution centres quickly using high-confidence, automated communications. Seller Central, where retailers and brands sell direct to consumers on the Amazon platform, does not require EDI, but skipping it risks the order volumes and high customer expectations that come with trading on Amazon. Direct Fulfilment, also known as Dropship, is available to selected vendors and uses EDI to give a real-time view of inventory across an entire product catalogue: Amazon tells the vendor a product has sold, and the vendor packs and ships it direct to the customer.