EDI and Dropshipping: The Ideal Combination

With dropshipping, as a retailer you avoid the costs of holding and managing inventory. You can invest these resources in presentation, marketing and order follow-up. This way you can collaborate with more trading partners and provide a distinctly customer-friendly service. A streamlined communication process is key. That is precisely why EDI and dropshipping form a high-performance tandem.

As a specialist in cloud-based supply chain solutions, Descartes keeps its finger on the pulse of global market evolution. These form the basis of innovative tools for simplified and optimized logistics processes. The company shares its insights with customers worldwide. In this article you will learn, for example, why EDI and dropshipping are inextricably linked.

Dropshipping (also called DTC or Direct-to-Consumer) is a method in which retailers purchase products from the manufacturer and have them delivered directly to their customers. This way they don't have to worry about stocks. The dropshipping supply chain concept gained popularity during the pandemic. Consumers could not go to the retailer and delivering bulky items directly to the customer was smarter.

Economists predict enormous growth in dropshipping over the next five to ten years. All stakeholders within the supply chain reap the benefits. Opportunities for sales growth are opening up for sellers, suppliers, distributors, logistics service providers, retailers and e-commerce stores. As a dropshipping company you are the hub between all these parties, but you are also dependent on them. Communication and information sharing are crucial. And so we come to the intersection of EDI and dropshipping.

The handling of an order within a DTC process can be quite complex. Various actors are involved, exchanging documents such as purchase orders, shipping notices and invoices. Streamlining this process provides clarity and limits the error rate. The easiest and most efficient way to do this is electronic data interchange (EDI). EDI standardizes incoming and outgoing electronic documents that you exchange with suppliers and logistics service providers.

Apart from the fact that completing such matters manually leads to significant loss of time (and therefore lower return), submitting orders in a specific EDI format is simply a requirement of many suppliers. EDI ensures a fully-automatic process, from the order by the consumer, through the purchase by the retailer from the manufacturer and/or wholesaler, to delivery to the consumer. During the entire process, everyone remains informed of the status of the order.

Descartes has an integrated EDI solution that meets all your DTC needs. You can call on our experts for targeted advice, supported by more than 30 years of experience and market leadership. The main assets? Fast implementation, total unburdening and a transparent cost structure.

As an entrepreneur, would you like to take your first steps in the world of dropshipping? Then come and talk to our experts first. They can explain to you in detail why EDI and dropshipping are linked. And especially what benefits Descartes' EDI solution has for you.