What is EDI?

EDI (electronic data interchange) is a standard way for two companies' computer systems to exchange business documents, such as purchase orders, invoices and ship notices, without anyone retyping them.

Instead of emailing a PDF purchase order that someone keys into an order system, a retailer sends a structured file that your system can read automatically. You send back an invoice in the same structured way.

Why do retailers require EDI?

Large retailers handle millions of orders. Manual paperwork doesn't scale, so they require suppliers to trade documents in a standard format. If you want to sell to most big-box or national retailers, EDI is a condition of doing business.

What does an EDI document look like?

In North America the most common standard is ANSI X12. Each document is a "transaction set" with a number. A purchase order is an 850. Here's a shortened example:

ST*850*0001~
BEG*00*SA*4500018273**20261104~
REF*IA*554433~
DTM*010*20261118~
N1*ST*WALMART DC 6094*UL*0078742000008~
PO1*1*240*EA*4.85**UP*012345678905*IN*009876543~
PID*F****STAINLESS WATER BOTTLE 24OZ~
CTT*1~
SE*10*0001~

Each line is a segment. The first few characters name the segment (for example BEG for the start of the order, PO1 for a line item), and asterisks separate the values. It's compact for machines, but hard for people to read. That's the gap an EDI translator fills.

What does an EDI translator do?

• Translates EDI into a format your systems understand, such as JSON or CSV, and back again.
• Validates documents against each partner's rules before they're sent.
• Exchanges files with your partners over secure connections like SFTP or AS2.
• Tracks every document and acknowledgment so nothing gets lost.

X12 vs. EDIFACT

X12 is used mostly in North America. EDIFACT is the United Nations standard used widely in Europe and internationally. They carry the same kinds of business documents with different structures. TradeFlo is built to handle both.

Getting started

Most suppliers start with the documents their biggest retail partner requires, usually the 850, 856 and 810. See our guide to retail EDI documents, or learn how TradeFlo works.

More guides: What are 837 and 835 transactions? · The supplier's guide to retail EDI documents