Amazon EDI: A Guide to Setting up EDI with Amazon Vendor Central
- September 28, 2023 / by Infocon Systems
Amazon is one of the world's largest online retailers, founded by Jeff Bezos in 1994. It initially started as an online bookstore but has since expanded to sell a wide variety of products, including electronics, clothing, home goods, and more. Amazon sells products under its own brand name to the customers and Amazon Vendor Central provides the ability to integrate with the seller's business software system via EDI.
Amazon Vendor Central offers vendors various options to exchange documents. These include the Electronic Data Interchange (EDI), the Vendor Central portal, and the Vendor Central API (Application Programming Interface). EDI is the preferred method for document exchange with Amazon Vendor Central. Vendor Central API is particularly well-suited for Direct Fulfillment Vendors, although EDI and API both systems have similar advantages and functionality.
In this blog post, we will offer a comprehensive overview of Amazon Vendor Central EDI and provide step-by-step guidance on how to set it up quickly and efficiently.
What is Amazon Vendor Central?
Amazon Vendor Central is a platform provided by Amazon that allows manufacturers and wholesale distributors to sell their products directly to Amazon as a supplier or vendor. In this business model, the vendor sells products to Amazon, and Amazon takes responsibility for listing, pricing, and fulfilling those products to end customers. Amazon Vendor Central integrates seller's transactions and day-to-day orders received from Amazon store into their business software system in both directions. This would mean extracting relevant data from the seller's system and sending it to the store and at the same time extracting information like sales orders from the store and automatically integrating into the company's internal system.
Key features and functions of Amazon Vendor Central include:
- Amazon places purchase orders with vendors for specific quantities of products. Vendors are expected to fulfill these orders within the specified timeframes.
- Vendors are responsible for shipping the products to Amazon's fulfillment centers. Amazon handles the storage and distribution of products from there.
- Amazon creates and manages product listings for the vendor's products on its platform. Vendors can provide product information and content, but Amazon has the final say in how the products are presented.
- Amazon typically handles customer service and returns related to products sold by vendors through Vendor Central.
- Vendors receive payments from Amazon for the products sold, minus any applicable fees and charges.
Access to Amazon Vendor Central is typically by invitation only, and Amazon chooses vendors based on various criteria, including the potential demand for the vendor's products on its platform.
What is Amazon Vendor Central EDI?
EDI (Electronic Data Interchange) is the computer-to-computer exchange of business documents between trading partners in a standardized electronic format. Amazon EDI allows for the exchange of business documents such as purchase orders, invoices, shipment notices, and payment information between with vendors.
How to Set Up EDI with Amazon Vendor Central?
Setting up EDI (Electronic Data Interchange) with Amazon Vendor Central is a process that involves several steps. Here is a general overview of how to set up EDI with Amazon Vendor Central:
- Obtain an Amazon Vendor Central Account: If you do not already have an Amazon Vendor Central account, you will need to apply for one. You can do this by visiting the Amazon Vendor Central website and following the instructions to apply for an account.
- Choose an EDI Service Provider: Choose an EDI service provider that aligns with your needs and budget.
- Communication Method: Determine how you'll communicate with Amazon. Amazon primarily uses AS2 (Applicability Statement 2) over HTTPS for secure EDI communication.. Map Your Data: Once your EDI connection is established, you will need to map your data to the Amazon Vendor Central format.Your chosen EDI provider will likely have tools to assist with this mapping and translation process.
- Testing and Certification: Before going live, work closely with your EDI provider to conduct testing to ensure that your You'll need to complete Amazon's testing and certification process, which may involve sending and receiving test transactions.
- Go Live: Once you have successfully tested your EDI connection, you can go live with your EDI system.
- Integration with Your ERP or Business Systems: Integrate your EDI solution with your enterprise resource planning (ERP) or business systems to automate the exchange of EDI documents with Amazon.
- EDI Document Exchange: Start exchanging EDI documents, such as purchase orders (EDI 850), invoices (EDI 810), and advanced ship notices (EDI 856), with Amazon as per their requirements.
- EDI Compliance and Ongoing Support: Maintain compliance with Amazon's EDI requirements, and ensure that your EDI solution stays up-to-date. If you encounter any difficulties or changes, reach out to Amazon's Vendor Central support or your EDI service provider for assistance.
It is important to note that setting up EDI with Amazon Vendor Central can be a complex process. It is recommended that you work with an experienced EDI service provider who can guide you through the process and ensure that your connection is properly set up.
How EDI Works with Amazon
Electronic Data Interchange is a way of exchanging business documents between a seller and Amazon. Here's how EDI typically works with Amazon:
- The vendor's EDI Software receives the PO and automatically updates the vendor's ERP system.
- The vendor processes the PO and ships the products to Amazon.
- The vendor sends an Advance shipping notice (ASN) to Amazon in EDI format, notifying Amazon of the shipment.
- Amazon receives the ASN and updates its inventory system.
- Once Amazon receives the shipment, it inspects the products and then processes the invoice and makes payment to the vendor according to the agreed-upon terms.
EDI enables Amazon and its vendors to exchange information seamlessly and quickly, improving the efficiency and accuracy of their supply chain operations. By automating the exchange of documents and data, EDI helps to reduce errors, increase productivity, and improve customer satisfaction.
What are the Amazon Vendor Central EDI Requirements?
To utilize EDI for document exchange in Amazon Vendor Central, you'll need a Vendor Central Account. Once you've set up your account, log in and contact the Amazon Administrator to request access to the EDI Self-Service Startup. This step is essential to kickstart your EDI integration with Amazon Vendor Central.
Here are some of the key Amazon Vendor Central EDI requirements:
1. To establish a connection with Amazon through Vendor Central's self-service survey, you'll need to provide various types of information.
- Product IDs and Measurement Codes: Select the product identifiers and type of measurement unit to accept Amazon orders.
- Sender/Receiver IDs: Get the essential Sender/Receiver IDs required to verify your EDI documents.
- Product Information: Send item details (in-stock, discontinued, invalid and backorder items) including Cost, Item Price, and Case Quantity.
- Communication Protocol: Choose an EDI communication type to use to exchange documents. Amazon often uses AS2 (Applicability Statement 2) over a secure HTTPS connection for EDI document exchange.
2. EDI Document Types: Vendors are typically required to exchange the following EDI document types with Amazon:
- Purchase Order (EDI 850): It contains data such as order type, items ordered, shipping location and methods.
- Inventory (EDI 846): Providing information about a company's available inventory, product activity, and stock levels to Amazon.
- Purchase Order Acknowledgement (EDI 855): Confirming the receipt and acceptance of a purchase
- Invoice (EDI 810): Includes essential information such as the seller's billing details, invoice number, invoice date, itemized charges, quantities, unit prices, total amounts, payment terms, and any applicable taxes or discounts.
- Advance Ship Notice (EDI 856): Notifying Amazon, such as a customer or retailer, about a pending shipment and provides detailed information about the contents of the shipment.
Avoid Charge-Back Using Amazon Vendor Central EDI
Amazon Vendor EDI chargebacks are penalties or fees imposed by Amazon on vendors for non-compliance with their Electronic Data Interchange (EDI) requirements or for issues related to the accuracy and timeliness of EDI transactions. Here are some common reasons for Amazon Vendor EDI chargebacks:
- Vendors failing to ship products within the specified timeframes outlined in the purchase orders (EDI 850).
- Vendors do not provide advanced ship notices (EDI 856) or if the ASNs contain inaccuracies, such as incorrect tracking numbers or shipment details.
- The invoiced prices (EDI 810) do not match the prices agreed upon in the purchase orders.
- Product labeling, including barcode and packaging requirements, is not compliant with Amazon's standards.
- Any inaccuracies or discrepancies in the EDI documents exchanged between the vendor and Amazon.
- Vendors do not meet Amazon's requirements for timely document exchange.
Amazon Vendor EDI chargebacks can be significant, and they can have a negative impact on a vendor's bottom line. It is important for vendors to be familiar with Amazon's EDI requirements and to take steps to ensure that their EDI system is compliant.
How to Effectively Integrate Amazon EDI with Your Backend Systems?
Amazon enforces strict order fulfillment guidelines and imposes penalties for late or inaccurate data. Therefore, you must establish a robust and dependable integration between your EDI system and your backend ERP, e-commerce, and logistics systems to prevent costly chargebacks. Neglecting this integration can lead to substantial financial penalties 1% of cost for delayed PO acknowledgements or POA changes, $5 to $150 for a delayed ASN, 2% to 6% of incurred cost for non-compliant ASNs. Considering that online retailers often operate on narrow net profit margins ranging from 0.5% to 3.5%, these charges have the potential to consume a substantial portion of your expected net profit, ranging from 25% to 200%.
To achieve seamless integration, you require a experienced EDI Provider. This EDI Provider plays a crucial role in automating essential transactions between Amazon Vendor Central and your backend systems, ensuring the security of cash flow and data exchange.
It's advisable to choose a EDI Provider that can:
- Provider accurate product and catalog information to Amazon via EDI
- Evaluate reliable and compliant AS2/EDI interactions with Amazon
- Eliminate SLA breaches and avoid costly fees resulting from non-conforming EDI processes or data inaccuracies
- Implement automation for Advance Ship Notices (ASNs), Purchase Order Acknowledgments (POAs), and other operational tasks
How much time does it typically require to integrate Amazon Vendor with EDI?
The amount of time it takes to integrate Amazon Vendor with EDI depends on a number of factors, including:
- The complexity of your EDI system
- Evaluate reliable and compliant AS2/EDI interactions with Amazon
- The number of applications and data sources that you need to integrate
- The experience of your EDI provider
- The resources that you have available
In general, you can expect the Amazon Vendor EDI integration process to take anywhere from a few weeks to several months.
Will Amazon EDI integration significantly benefit your business?
You must evaluate whether your current business processes, involving people and documents, are suitable for the level of sales you plan to achieve in the coming quarters.
In some cases, organizations focus heavily on optimizing their product listings and advertising cost of sales but overlook how these efforts impact their warehouse and financial operations. They may also disregard certain chargebacks and hidden expenses.
This oversight can result in reduced profits and increased operational costs. Without integration, your overall workflow can become congested, requiring more manual labor and resources to maintain efficiency.
Here are some of the benefits that Amazon EDI integration offers to businesses:
- Access to more data: EDI integration with Amazon would allow accessing a wider range of data from different sources. This would improve the ability to answer any questions in a comprehensive and informative way.
- Improved accuracy: EDI automation streamlines the exchange of critical business documents between vendors and Amazon. This reduces manual data entry, minimizing the risk of errors and ensuring data accuracy.
- Real-time Communication: EDI enables real-time communication between vendors and Amazon. This means that both parties can access up-to-date information about order status, inventory levels, and shipment tracking, improving visibility and decision-making.
- Cost Savings: Automation through EDI reduces the need for manual data entry, paper documents, and human intervention. This can lead to cost savings in terms of labor, printing, and postage.
Strategies for Seamless EDI Integration with Amazon Vendor Central
- Choose an EDI provider that aligns with Amazon's requirements and your business needs
- Work closely with your chosen EDI provider to guarantee that your system aligns with Amazon's EDI specifications
- Utilize Amazon's testing environment to validate your EDI transactions before going live
- Implement automation to streamline EDI document generation and exchange
- Maintain data accuracy in EDI documents to prevent errors and chargebacks
- Design your EDI integration to accommodate future growth and changing needs
Amazon EDI Integration from the Inofocn Systems Experts
Inofocn Systems offers fully-managed EDI & API Connectivity solutions for Amazon that connect Vendors with their all major ERP systems/accounting packages and Third Party Logistics Centers (3PLs). Our cloud-based EDI process enables you to exchange required business documents to Amazon with the confidence that your Amazon compliant EDI transactions are processed with the proper data and unique EDI guidelines. Amazon EDI integration with Infocon Systems helps you to remove any additional manual processes or errors, minimizing your risk of charge-backs.
To know more on how we implement EDI for Amazon and integrate into any of their internal systems, contact our sales department at +1 888-339-0722 or email us at sales@infoconn.com