Our integration solutions streamline drop shipping operations by automating order processing, inventory management, and supplier communication.

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Cloud-Based Integration of E-commerce with Dropshipping Supplier

This article spotlights a real-world scenario, where EDI2XML steps in to facilitate an efficient data exchange between an e-commerce entity and its dropshipping supplier.

Introduction: Integration Insights from EDI2XML for E-commerce and Dropshipping Success

As a company with a deep understanding of e-commerce automation, EDI2XML is committed to sharing its wealth of experience with other businesses. Through our knowledge and proven strategies, we strive to empower businesses to unlock the full potential of their online trading operations.

Background: Online Retailers, Dropshipping and EDI

The e-commerce ecosystem often relies on partnerships to enhance efficiency and broaden product selections. For instance, online retailers frequently join forces with dropshippers, eliminating the need for inventory storage and management. This mutually beneficial collaboration allows businesses to focus on customer experience and marketing, leaving the logistics to reliable dropshipping partners.

USEFUL: What is Dropshipping on Amazon?

Dropship suppliers, often require EDI (Electronic Data Interchange) for its efficiency in automating order processing, inventory management, and communication.

EDI2XML Automation Goals

Our e-commerce integration model centers on the integration between a client’s online store, which could be built on any e-commerce platform like Shopify, BigCommerce, or eBay, and a dropshipping supplier.

The primary objective is to seamlessly exchange Electronic Data Interchange (EDI) transactions, between the Client and their dropshipping partner.
Amazon Integration

This involves EDI2XML acting as an intermediary to collect and transform orders from the e-commerce store into EDI X12 format for transmission to the dropshipping supplier. Additionally, it ensures the smooth reception and processing of inventory feeds (EDI 846), and advanced ship notices (EDI 856) from dropshipper, updating the e-commerce instances using REST API connectors.

Technical Insights

Integration of e-commerce and dropshipping supplier typically involves the use of the following standard EDI documents:
  • Outgoing Documents (From Client to Dropshipping Supplier): EDI 850 Sales Order
  • Incoming Documents (From Dropshipping Supplier to Client): EDI 846 Inventory Inquiry and Advice, EDI 856 Advanced Ship Notice
  • Possible Connectivity: VAN/FTP/sFTP for Dropshipping Supplier, Shopify REST API, eBay API Tools or other API for respective e-commerce instances.

TAKEAWAY: Implementing Application Programming Interface (API) integration is fundamental for real-time communication between the e-commerce platform and the dropshipping supplier’s systems. APIs enable the exchange of data related to product information, inventory levels, order processing, and more. A robust API connection forms the backbone of a successful e-commerce integration.

Key Components of E-commerce Integration

Embarking on an e-commerce integration project, especially with a dropshipping supplier, involves several crucial components to ensure a seamless and efficient collaboration. Below are the key elements typically considered in such projects:

Automated Order Processing:

One of the primary goals of integrating with a dropshipping supplier is to automate the order processing workflow. This involves near real-time synchronization between the online store’s platform and dropshipper’s management system.
e-commerce

When a customer places an order on the online store, the integration should seamlessly transmit order details to the supplier’s system. This automation eliminates the need for manual order placement and expedites order fulfillment.

Example of the flow of data for outgoing documents from client to dropshipper
  • EDI2XML processor initiates every 15 minutes.
  • Checks for new orders on e-commerce platform.
  • Extracts information, converts to X12 format and builds EDI 850 document.
  • Connects to drop shipper’s sFTP mailbox and drops the generated x12 file(s).

Another option is when the received order is converted into the required format (XML, JSON, CSV) and pushed directly to the dropshipper’s management system.

Inventory Management, Pricing and Product Updates:

Efficient inventory management is crucial for preventing stockouts and ensuring timely order fulfillment. The integration will include a mechanism to update the online store’s inventory in near real-time based on dropshipper’s stock levels. This ensures that customers are presented with accurate product availability information.

Example of the flow of data for incoming information from dropshipper to client
  • EDI2XML processor connects to dropshipper’s mailbox every 15 minutes.
  • EDI 846-Inventory Status in x12 format.
  • Converts x12 documents to appropriate formats for e-commerce.
  • Updates inventory values (EDI 846) on e-commerce platform.
  • Sends email notification about received and processed documents.

Pricing instabilities and product updates are common in the retail industry. Exchanging EDI 846 allows the online store to reflect real-time changes in dropshipping supplier’s pricing and product catalog, ensuring that customers always receive the latest information.

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Shipping and Tracking Integration:

Seamless communication between the online store and dropshipper’s shipping system is essential for providing customers with accurate shipping estimates and order fulfillment / tracking information. The use of EDI 856 Advanced Ship Notice enable real-time updates on shipping status and tracking details directly within the online store’s interface.

Benefits of E-commerce Automation

Time and Cost Savings:

By automating order processing, inventory management, and other essential tasks, the online store can significantly reduce the time and resources spent on manual operations. This translates to cost savings and increased overall operational efficiency.

Enhanced Customer Experience:

Automated integration ensures that customers receive accurate product information, timely order updates, and reliable shipping details. This contributes to an improved overall shopping experience, fostering customer loyalty and satisfaction.

Scalability:

In contrast to public app, our custom e-commerce integration solution can easily scale to accommodate increased order volumes and a growing product catalog.

This scalability feature becomes particularly crucial for businesses aiming to expand without facing the limitations often encountered with off-the-shelf automation tools.

Useful reading: Shopify Private or Public app: What’s Best for ERP Integration

Conclusion: E-Commerce Integration with Dropshipping Suppliers

Successful e-commerce integration with dropshipping suppliers is vital for enhancing operational efficiency and customer satisfaction. At EDI2XML, we understand the intricate details of this process and offer proven strategies to unlock the full potential of your online trading operations.

If you’re ready to streamline your e-commerce integration, take the first step by scheduling a free consultation with our integration expert.

Discover how our expertise can empower your business through seamless EDI transactions and efficient data exchange.
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Top 3 Reasons For EDI Integration With Shopify

This post was updated to reflect current trends and information.
EDI integration with Shopify

In short, Shopify is one of the leading Canadian eCommerce platforms offered to businesses and individuals, based on a monthly subscription fee. Anyone can subscribe and then begin to showcase their products online, to sell directly to the public. For more information about Shopify, you can visit their website here.

Who Uses Shopify?

Shopify is a popular e-commerce platform that can be used by individuals and businesses of all sizes to create and manage their online stores. Here are some of the types of people who use Shopify:
  1. Small business owners: Shopify is an excellent platform for small business owners who want to sell products online without having to deal with the technical aspects of building an e-commerce website.
  2. Entrepreneurs: Many entrepreneurs use Shopify to create and sell their own products online, whether it be clothing, beauty products, or digital downloads.
  3. Large businesses: Shopify’s scalability makes it a popular choice for larger businesses that need a platform that can handle high levels of traffic and sales.
  4. Dropshippers: Shopify’s integrations with popular dropshipping apps and tools make it an attractive option for dropshippers who want to sell products without having to hold inventory.
  5. Non-profits: Shopify offers special pricing and features for non-profits, making it an excellent platform for charities and other non-profit organizations to sell merchandise and raise funds online.

Overall, Shopify is a flexible platform that can be used by a wide range of people and businesses to create and manage their online stores.

A Word on Drop-Shipping

One important thing to emphasize here is that with the emergence of the online retail (or eCommerce) market, companies selling products through the Internet on platforms such as Shopify, are not necessarily carrying inventory of their products anymore.

More and more, once a company receives an online order from a customer (through the Shopify platform), these orders are then transferred to the manufacturing business partner(s) for shipping and delivery of the bought item(s), where they are told the “white label” the delivery package. This concept is called “Drop-Ship” (or Drop Shipping) in the retail and eCommerce world. Basically, the seller receives orders from their online retail store and is paid via the Internet (through PayPal or credit card) and then forwards the order to the manufacturer to then ship directly to the client. For many, there is now no need to hold inventory in a local warehouse.

What Does EDI Have To Do With eCommerce?

For those who aren’t very familiar with EDI (or Electronic Data Interchange), it is a set of standards and processes to exchange business documents electronically between Business (or Trading) Partners. Common business documents include Purchase Orders, Invoices, ASNs (Advance Ship Notice), Inventory Inquiry/Advice and more. This data exchange can happen in both directions – incoming and outgoing.

In the context of online sales over the Internet, on an eCommerce platform like Shopify as well as with the introduction of drop-shipping, EDI comes into play for several reasons;

1. Most major manufacturing and distribution companies will require a system-to-system integration through some sort of EDI. This speeds up processes and allows for greater efficiency in partner communication.

2. Shipping companies also require integration via EDI.

3. Today, consumers are 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 may notice, all of the above requires system-to-system integration between so many unrelated or diverse systems and platforms. At this point in time, most major companies and retailers are well equipped with EDI platforms and standards in which they have been investing in for many years now. Companies are now finding more ways to use their EDI to increase efficiency and are truly seeing returns on their investments.

Top 3 Reasons Why You Need EDI Integration With Shopify

The reasons may seem obvious to you at this point, but I will re-iterate the top 3 reasons for EDI integration with your Shopify store or any other eCommerce platform;

Cloud Services Provider If you are in the Drop-Ship business and you are selling online through Amazon, Wal-Mart, Cabela’s or Target, for example, chances are that these retailers will impose certain rules, and require that you go on EDI. If you are dealing with suppliers, they will also impose similar rules and require the use of EDI.

Cloud Services Provider If you are selling online through your own store via Shopify, and you have a high volume of clients that expect to the informed of their orders at any given moment, this is another big reason why you should have EDI integrated with your Shopify store.

Cloud Services Provider If you are dealing with shipping companies like FedEx, Purolator, UPS, etc., and you have a high volume of shipments on a daily basis, then you need to integrate your management systems AND Shopify with EDI.

The above are the main reasons for EDI integration but there are tons of other ways EDI can improve your processes and reasons to talk with an EDI consultant today.

How Can I Integrate My Shopify Store with EDI?

This integration is very feasible however you will most definitely need a team of system integrators with a high knowledge and expertise in EDI. With the right team like the EDI2XML team, there is no going wrong.

If you are interested in learning more about this topic or any other issue related to EDI integration projects, please contact us today and receive your free consultation.
Shopify integration
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4 Challenges of EDI and Drop-Ship in eCommerce


This post was updated to reflect current trends and information.

EDI integration projects


The term “drop-ship” has been used quite a lot in recent years by retailers and manufacturers alike. This supply chain management method looks to be gaining in popularity going into 2019 and will likely be in high demand for years to come as well.

Let me first explain the meaning of drop shipping and how it has become so popular…

What is Drop Shipping?

“Drop-ship” is a fulfillment method where a merchant does not carry any inventory on hand. Instead they sell products to consumers via an online store (eCommerce), send the customers’ orders to the manufacturer and have the manufacturer ship the goods directly to the customer. The customer will never know the difference since they pay the merchant and receive their goods in a box with the merchant’s labels. This method eliminates the need for the merchant to handle the goods.

The Rise of Drop-Ship Popularity

Due to the fast evolution of eCommerce, coupled with the continuous challenges that businesses face to reduce costs and increase profitability, the drop-ship method is in high in demand by major retailers. You’ll find that eCommerce giants like Amazon.com, Costco.com, Cabelas.com, Sears.com and others, are increasing the pressure on their supply chain to adopt the drop-ship concept. Of course, they also require their business partners to comply with their EDI requirements and specs for a full automation of the entire sales cycle.

The Complexity behind Drop Shipping

If we take a behind-the-scenes look at drop shipping from 2 perspectives, from the eCommerce retailer, like Amazon or Cabela’s, and from the manufacturer of goods, we’ll find the simplicities and complexities behind each process.

From the perspective of the eCommerce retailer, the drop-ship method allows them to eliminate the need to carry any inventory and to ship their goods. Their process is rather simple, profitable and quick. All they need to do is sell products online and ensure that their partnered manufacturers are EDI and drop-ship ready. Once they sell products from their eCommerce site, they will send the orders via EDI to their manufacturer and the manufacturer takes it from there.

From the perspective of the manufacturer, we’ll find some of the complexities. However, if they are setup correctly from the get-go, then it becomes rather simple and quick. In this case, the drop-shipper (manufacturer or distributer) is entirely in charge of the fulfillment of all incoming eCommerce orders (from the retailer). They need to process the sale all the while complying with the retailer’s business specifications such as EDI. Let’s go over the top 4 challenges a manufacturer must overcome during a drop-ship EDI implementation;

Top 4 Challenges the Drop-Shipper Might Face

If you are a manufacturer and have recently partnered with an eCommerce retailer to sell your products, then you might already know that they will require you to drop ship and automate your sales process through EDI integration. I have listed below the top 4 challenges you might face as a drop shipper;

1.    Ability to submit accurate inventory feed (846) to the eCommerce retailer

When starting a new business relationship with an eCommerce retailer based on the drop-ship method, the first step will be to feed inventory & per-item stock statuses to the retailer in a timely manner. This inventory inquiry/advice document is called EDI 846. Major retailers such as Amazon.com, Cabelas.com, Costco.com and Wal-Mart.com require their Trading Partners to send them an 846 document at least twice a day so that their online store can properly show only available products, based on inventory available to ship. Most of the time, companies either don’t have an accurate inventory system or their stock status is not properly maintained, which can be a great challenge to overcome. Even if companies have accurate inventory statuses, many of their management software systems, even reputable and expensive systems such as JDE, do not have built-in capabilities to send the 846-inventory status in X12 format, as per the requirements of the retailers.

2.    Ability to receive and process EDI orders (850)

Another challenge comes in the form of receiving EDI purchase orders (document 850). Many companies struggle with the capability to receive EDI orders, process them and integrate them quickly into their management system before it is sent to the pick/pack/ship process down the line in the supply chain. Most software systems are still missing this integration capability and require end users to manually key-in orders received in EDI x12 format, to then be able to process and ship. This is a great challenge for many manufacturing and distribution businesses. Dealing with eCommerce Stores, orders are continuously coming in, at all hours, in high volumes. The client (retailer) typically expects the manufacturers to ship within 24 to 48 hours (at the latest!). Moreover, eCommerce retailers are expecting to receive a P/O acknowledgment (document 855) via EDI. Therefore, it’s extremely critical that the drop shipper is equipped with a fully integrated software solution where EDI orders can automatically come through in real-time, so that they are quickly processed.

3.    Ability to fulfill orders within a very short period of time

As previously mentioned, eCommerce retailers expect their partners to ship goods to the end-consumer within a very short time frame (24 to 48 hours). They expect them to package the products, print customized picking/packing slips to send with the goods and complete the shipping process in a very quick manner. In case of failure to comply, there is a risk the vendor will be eliminated from the program. At the logistics level, an important challenge is to have a management system and required resources to process orders, pick, pack and ship in the required time frame. Efficiency in this case is imperative since time is money.

4.    Ability to electronically submit Ship Notices (856) & Invoices (810)

Two other EDI x12 documents are sent out to the eCommerce retailer by the drop shipper; the Advance Ship Notice or ASN (document 856) and of course an invoice (document 810). Most companies don’t currently have the capability to turn those business documents into an x12 EDI format and submit to the Trading Partner, straight from their management system.

Overcoming Drop-Ship Challenges

Our team’s experience with EDI drop-ship has allowed us to overcome the above challenges in an efficient and timely manner. Since every project varies, it’s important to do the following;

  • Surround yourself with experts in EDI who have the experience in dealing with drop-ship projects. It’s important to have enough knowledge and expertise in these methods prior to beginning any EDI drop-ship project. It’s important to get organized internally before any major project.
  • Ask an EDI Provider, who offers flexible and affordable EDI & IT services, to help you streamline your processes and advise you on best practices.
  • Opt for a full EDI integration with your current management software solution, if possible. Of course, such an option is not always possible or provided by your Software provider but if it is, it’s our recommendation to go ahead with this since it will eliminate chargebacks and increase efficiency in your EDI projects so you are best capable of complying with your Trading Partners’ demands. Don’t forget, partner demands and specs can change at any moment. It’s best to ensure you can handle changes at a moment’s notice. (Flexibility is the way to go!)

If you’re looking to complete an EDI Drop-Ship project, contact us today. We’ve got the experts and the EDI2XML service to get you drop-ship ready. Contact us today for your FREE consultation to evaluate your EDI project.

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