Costco EDI: How to become EDI compliant with Costco
- April 18, 2023 / by Infocon Systems
Headquartered in Issaquah, Washington, Costco Wholesale Corporation is a multi-billion dollar global retailer with warehouse club operations in eleven countries. Costco is the fifth largest retailer in the world and founded on September 15, 1983. The company offers a wide variety of products like electronics, computers, furniture, outdoor living, appliances, jewelry and more.
Looking to get your products on the shelves and sell them on Costco? You have chosen a hard but right path. To be a supplier for Costco, you first need to submit your product for approval. Once Costco has approved products, the second is to become EDI compliant with Costco.
Any company that wants to become a merchandise supplier on the Costco platform needs to follow two important steps.
Step 1: Products or Listing Approval Process
Before you get listed, you must submit your product for listing review.
- Add some lines for products benefits
- Add photos or illustrations of the product
- Add product’s price and ordering information
- Send relevant documents like patents or other documentation
- Present packaging structure of product
- Contact details with website url
Step 2: Costco EDI Compliance
To be a merchandise supplier of Costco, you’ll need to exchange important business documents through EDI. For more information about EDI (electronic data interchange), check out our Fresh Guide to EDI. Suppliers have requirements for Costco EDI setup and maintenance that are important in keeping compliant.
Costco lays out 4 EDI setup requirements for all partners
- Able to exchange the required EDI document set
- EDI data testing time frame
- EDI Connection requirements
- Functional acknowledgment expectations
First As a supplier of Costco your company may be required to send the following EDI business document types:
- Invoices (EDI 810)
- Payment Order/Remittance Advice (EDI 820)
- Purchase Orders (EDI 850)
- Purchase Order Acknowledgements (EDI 855)
- Shipping Notices (EDI 856)
- Acknowledgements (EDI 997)
Second, for EDI testing, Costco decides the period in which companies must prove that they are capable of transmitting all of the basic documents within a given time frame.
Third, Costco requires compliance with numerous EDI protocols and specific shipping labels. It is required that suppliers must be online in its communication with Costco.
Fourth, suppliers MUST send EDI 997 functional acknowledgments no more than 24 hours from when Costco purchase orders were placed in their mailbox.
Why is Costco EDI compliance important for Suppliers?
With Costco demanding that suppliers who want to trade with Costco be EDI compliant, the importance of becoming EDI capable cannot be understated, especially given how EDI compliant can benefit your bottom line.
At its most basic level, EDI compliance means suppliers can use EDI to receive purchase orders and send out invoices.
Benefits of Costco EDI Compliance
Trading with Costco through EDI is meant to be efficient and cost-effective. It helps in automating processes, improves inventory’s efficiency, accuracy and increases visibility. It also enhances customer service by digitizing the order processing. Using EDI, supply chain management can be benefited with exact & traceable real time information.
The key benefits are explained below:
- Eliminate human error and save costs.
- Improve inventory management. .
- Increase Order Efficiency.
- Increase Sales with Drop-Shipping.
- Less Paperless and environmentally friendly.
- Initial setup is time consuming
Infocon Systems supports full automation of business documents like purchase order, advance shipping notices, invoice etc. and also enables the supplier to easily download the Costco GS1 shipping label and branded packing slip.
To learn more about how Infocon Systems can take care of your EDI needs for Costco, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.