Why EDI is a vital ingredient in any partnership with Amazon

Want to sell your products through Amazon? EDI is a vital ingredient in any partnership with Jeff Bezos’ behemoth.

The global pandemic has triggered an online shopping boom. While ecommerce was growing steadily prior to Covid-19, ecommerce penetration has accelerated dramatically achieving ten years’ growth in just two months, according to analysts at McKinsey.

Amazon has clearly emerged as one of the big winners with analysts suggesting the company may reach the historic milestone of $100 billion in sales for the final quarter of 2020. These figures should come as little surprise considering Amazon has now achieved 150 million paying Prime members globally, each spending an average of $1,000 a year.

While all this sounds like great news for Jeff Bezos, it also brings some lucrative opportunities for retailers, brands and manufacturers who partner with the online giant. There are three partnership models for vendors to choose from and EDI has a pivotal role to play in all of them.

Vendor Central – where EDI is compulsory

The first partnership model is Vendor Central, which involves manufacturers selling their products in bulk to Amazon, which brands the items before selling them on.

EDI is compulsory for any company entering into an Amazon Vendor Central partnership, and for good reason. This is because speed, accuracy, profitability and customer experience are at the centre of Amazon’s customer offering. Amazon insists on EDI’s streamlined and automated communications so that its partners can ship to distribution centres quickly and accurately using high-confidence EDI-powered supply chains.

Amazon’s Vendor Central EDI requirements include the ability to transmit and receive invoices, purchase orders, advance ship notices (ASNs) and other documents via electronic data interchange.

Seller Central – where ignoring EDI could be a costly mistake

The second Amazon partnership model is a marketplace called Seller Central, which enables retailers and brands to sell their products to consumers using the Amazon platform. Amazon doesn’t necessarily require sellers to use EDI, but it could be a costly mistake considering the order volumes and high expectations of Amazon customers. The biggest benefits for Seller Central partners using EDI are the speed and agility to process and fulfil orders quickly and accurately, creating great customer experiences and attracting all-important positive customer reviews.

Without EDI, vendors must manually re-type all of their Amazon orders into their business systems – an expensive, error-prone and time-consuming exercise that is destined to delay order fulfilment and erode customer loyalty.

EDI also enables Seller Central vendors to automatically handle both inbound orders from Amazon and outbound tracking information for customers – maximising the growth potential Amazon offers.

Amazon Direct Fulfilment – an EDI-powered real-time view of inventory

The third and final partnership model, which benefits greatly from EDI use, is Amazon Direct Fulfilment. Also known as Dropship, the Direct Fulfilment programme is available to select vendors. A Direct Fulfilment connection enables vendors to provide real-time inventory via EDI for their entire catalogue.

A simplified view of the purchase flow looks like this: the Amazon customer buys a product, Amazon tells the vendor the product has been sold and the vendor packs and ships the product direct to the customer.

Would you like to harness the power of cloud-based EDI from Transalis to drive your Amazon partnership?

Find out more about what you should look for when choosing a partner to connect to Amazon EDI.