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3 reasons for EDI integration with Shopify

3 reasons for EDI integration with Shopify

This article was taken from our blog, published on our EDI2XML platform.

Shopping cart Icon on smart phone screen over blur mall

Many times, when I meet business owners and executives, the same question comes up during the discussion: why do companies operating eCommerce stores on Shopify or Magento need to have EDI integration? I decided to publish this post, and explain my points, by identifying the top (3) reasons why businesses running on Shopify, need to comply and integrate with EDI.

What is Shopify?

In a quick description, Shopify is one of the leading Canadian eCommerce platforms offered to clients based on monthly subscription fee, where companies and individuals can subscribe, put up their own items on the eCommerce platform, and start selling to the public. For more information about Shopify, you can visit their website, it has tons of information about how things are done.

Who uses Shopify?

Individuals or companies of all sizes, who want to sell products online to their clients and B2C consumers, are mostly the users of a platform such as Shopify. With less than 100 $ a month, they can start selling products and ship it to their clients.

A word about Drop-Shipping

One important thing to emphasize here is that with the emergence of the online retail and eCommerce over the internet, companies selling products online on platforms such as Shopify, are not necessarily carrying inventory of the products they are selling.

They do receive the order from the consumer online into the Shopify platform (or store), and than they transfer this order to the manufacturing business partner(s) for shipping and delivery, while “white labelling” the packaging delivery. This concept is called “Drop-Ship” (or Drop shipping) in the retail and eCommerce world. The store owner will receive the order from the consumer, who gets paid for the merchandise upfront. The Store owner forward the order to the maker for shipment and direct delivery to the consumer.

What EDI has to do in this context of eCommerce?

As a reminder about EDI (Electronic Data Interchange), it is a set of standards and processes to exchange documents of business nature electronically between business partners. What I mean by business documents is Purchase Order, Invoice. This data exchange can happen in both direction (in and out).

In the context of online sales over the internet on a platform such as Shopify and drop-shipping orders, the EDI comes into play for several reasons:

  • Most manufacturing an major distribution will require a system-to-system integration through some sort of EDI
  • Shipping companies require also integration via EDI
  • Consumer today is very well educated and require to be informed on the status of their orders at every step of the way during the shipping process.

As you notice, all the above requires system-to-system integration between so many heterogenous systems and platforms. All major companies and retailers are well equipped with EDI platforms and standards that they have been investing in developing for years now, so it is the right moment for them to pay off all their investments.

Top (3) reasons why you need EDI integration with Shopify

As you might have noticed from the previous sections, the reasons are very obvious, to have an EDI integration with your Shopify store:

  • If you are in the Drop-Ship business and you are selling online, chances are that your suppliers will impose on you to go on EDI.

  • When you are selling online on Shopify, and you have a high volume of clients, that require to be informed of their orders at any given moment, this is another reason why you need to have EID integrated with your Shopify store

  • In case you are dealing with shipping companies (FedEx, Purolator, UPS…) and you have high volume of shipments daily, you need to integrate your systems and Shopify with EDI

The above are the main reasons for such a need, still more reasons are out there, just wanted to share the most important ones.

But can we integrate Shopify with EDI?

Certainly, it is feasible, we do this every day. With the right team of integrators, that have years of expertise in integrating EDI to any system, there is no going wrong.

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How To Select An Integration Method That Works Best For Your eCommerce Platform

This article was taken from our blog, published on our EDI2XML platform back in 2014.

eCommerce-IntegrationDo you have your own eCommerce Store, perhaps built with Shopify, or sell your goods online through Amazon, Cabela’s, eBay, etc.? If so, we are quite certain you’ve already been in discussion about how to best exchange data between you and your Trading Partner(s) or between your eCommerce platform and your internal software management system (i.e. your ERP system, CRM (Salesforce)…). In some cases, you may not have much of a choice, as some Trading Partners send their communication requirements prior to beginning a business relationship. For example, partners like Cabela’s or Amazon often push suppliers to be EDI compliant. At that point, it’s time to get in contact with an EDI provider to learn more about this process for your specific business needs.

When it comes to integration between your eCommerce platform and your management system, this process will allow your two systems to interact seamlessly, without any need for human intervention. How it works is that you allow data from the eCommerce system to automatically be sent to your management system, as for example any new online orders, also allow your eCommerce system to receive data from your management system, for example, inventory statuses. This ensures your consumers are well aware of inventory on hand and their orders can be processed right away.

So, if you are unsure of what steps you should take, then I highly suggest you read through the following blog and then contact us to schedule a consultation with one of our experts. Every case is different and it’s best to go over your specific requirements and current capabilities with an integrations expert before making a decision. Of course, we highly recommend eCommerce integration as it improves efficiency, minimizes manual data entry and errors, increases order processing and allows for scalability.

What are some of the different integration methods?

  1. Electronic Data Interchange (EDI)

As experts of EDI, we’ve written quite a few articles on this topic. This protocol has been around for many years and is used to exchange data between business partners. The data being exchanged in “EDI format” is pre-defined in both format and structure. Trading partners can have their own file specifications. Files can be transmitted using several different types of secured communication protocols such as a VAN, AS2, FTP/sFTP, etc. This method is very popular in the manufacturing, retail, automotive, healthcare and pharmaceutical industries.

  1. XML

XML, or Extensible Markup Language, is a very common format, used to transfer well-structured data between business partners. It was designed to be self-descriptive allowing users to define their own XML tags to describe the data.

  1. Web Services

Web Services is a method of communication between 2 electronic devices over a network. It uses the Internet as a communication and transport protocol and the XML language to format the data transmitted back and forth.

So, which method is best for your eCommerce integration project? Well, that of course depends on your specific business needs. It’s important for companies to analyze their technical capabilities and ensure it aligns well with their business requirements;

  • Does your internal IT team have any experience and expertise with any of the above integration methods? If so, which method are they more familiar with? If you don’t have an internal IT department, contact your IT provider and explain your business needs. They’ll suggest the best method for your specific case.
  • List the technical advantages of using one method over the others.
  • What are the costs for both of these options, for your specific case?
  • What is the timeframe to get setup for these options, for your specific case?
  • Are you already EDI-compliant due to requests from other Trading Partners? If so, EDI may be your best best.

If you’ve chosen EDI to be your integration method, then here is a list of questions to answer before speaking with an EDI consultant, so they’ll know exactly how best to help you;

  • What system(s) do you currently use to manage your business operations? (if any)
    • Do you use one fully integrated management system or multiple systems for various business functions? For example, Quickbooks for your Accounting, Hubspot for your CRM/Sales, etc.
    • If you use multiple systems, are these systems integrated with one another? If not, are you manually inputting data in one system, then doing the same task in another system and so forth?
  • What is your current workflow (at a business level)? If you can draw it that would be best!
  • How many warehouses do you have? (if any)
  • How many SKUs do you have, that will be used for EDI purposes?
  • Are you currently shipping your goods to DCs (Distribution Centers) or doing Drop-Ship? (or both, depending on the retailer)
  • Are you capable of extracting an accurate inventory status from your current inventory management system?
    • If so, can this be automated to produce this status multiple times a day, if needed?
  • Can you do pick/pack with your current inventory management system?

Jot down the answers to these questions, then contact us. We’ll be happy to help you with your eCommerce integration needs.

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