Amazon EDI Integration and Connection - Essentials Guide

In the era of the "Amazon effect" where online shopping dominates, understanding the crucial components of Amazon EDI integration and connection is essential for businesses looking to thrive in the digital marketplace.
If you're an Amazon vendor who's been accepted into the Amazon Vendor Direct Fulfillment program or are considering joining, it is time to uncover some essential information about the program itself and the integration processes that are required.

• What is EDI for Amazon Vendor Central?
• Will Amazon EDI Integration Benefit You?
• Amazon EDI Transactions
• Which Way Should You Integrate with Amazon - EDI or API?
• What if Your ERP Can't Do APIs or EDI?
• What Are the Amazon Vendor Central EDI Requirements?
• How to Integrate Amazon EDI Effectively with Your Backend Systems
• Where Should You Start with Amazon Vendor Integration?
• Best Practices for Successful Amazon EDI Integration

Being invited to the Amazon Vendor Central platform is an incredible opportunity that holds the power to rapidly boost sales and expand your business. However, as with most good things, challenges lie ahead. Amazon has established strict vendor criteria that must be met for electronic data interchange (EDI) or application programming interface (API) integration. 

For a considerable time, Amazon heavily relied on EDI to exchange information about purchase orders, shipments, and invoices. However, a few years ago this changed when Amazon introduced a new vendor API in 2020. This API works particularly well for direct fulfillment vendors. Although these two B2B integration methods (EDI and API) offer similar benefits and functionality, the more recent API is an attractive option with new features for vendors venturing into direct fulfillment.

If what we're talking about so far sounds like unfamiliar territory, do not be intimidated. In this blog, we'll provide a comprehensive overview of setting up EDI and API integrations with Amazon Vendor Central, so you can successfully connect your digital ecosystem to Amazon and start growing your business.

What Is Amazon Vendor Central?

Amazon Vendor Central is a prestigious platform reserved exclusively for select manufacturers, distributors, and suppliers seeking a prime opportunity to promote and sell their products on the world's largest online marketplace. This coveted invitation grants you the privilege of having Amazon itself purchase your products, while proudly displaying the "ships from and sold by Amazon.com" label on its site.

By embracing the power of Amazon Vendor Central, you can effortlessly expand your sales without the burden of direct customer interactions. Bid farewell to the complexities of managing reviews and ratings, and other associated challenges. As an esteemed Amazon vendor, you can relinquish the responsibility of inventory management, pricing strategies, Amazon logistics, customer service, and returns to the capable hands of Amazon, allowing you to sit back and reap the rewards of your entrepreneurial prowess.

Moreover, Amazon extends an enticing offer known as Vendor Central Direct Fulfillment. This option empowers you to sell products under the Amazon umbrella while shipping items directly to eager shoppers, thereby maximizing your revenue velocity and profits and adding significant value to your bottom line.

Should you decide to accept Amazon's invitation, adhere to its conditions, and ultimately register your Vendor Central account, you will unlock a plethora of exceptional benefits awaiting your exploration. Some of these advantages include:

• Seamlessly receive and fulfill orders, with the convenience of sending shipment data effortlessly
• Effortlessly provide listing information, encompassing vivid images, compelling product features, and other crucial details
• Enjoy hassle-free management of invoices and reimbursements, ensuring streamlined financial transactions
• Harness the potential of tailored Amazon ad campaigns, enabling you to reach your target audience and boost brand visibility
• Gain access to insightful visual reports that grant you comprehensive knowledge of your overall business profitability

It is essential to note that Amazon Vendor Central operates solely on an invitation basis from the eCommerce giant. This arrangement entails a first-party vendor relationship, wherein you engage in wholesale transactions with Amazon instead of selling directly to individual customers. Amazon then assumes the role of distributing your brand or manufacturing your products.

What Is EDI for Amazon Vendor Central?

EDI, which stands for Electronic Data Interchange, enables seamless data exchange between two servers, typically involving purchase orders and invoices.

Implementing Amazon EDI integration is a proactive move towards fostering a harmonious relationship with your vendor account manager. Once you've communicated your intention to your account manager, they will undoubtedly recognize its significance.

Why Integrate with Amazon Vendor Central?

To put it plainly, using Amazon to manage rising sales volumes can be difficult due to communication, data, and cash flow issues. If you're an Amazon Vendor, you're likely familiar with the tedious paperwork and data entry processes. To address this challenge, organizations often assign dedicated staff members to handle purchase order (PO) processing each morning. However, managing the paperwork can become overwhelming, especially for vendors with higher sales volumes.

Integration is the key to streamlining this process. Amazon encourages vendors to embrace Electronic Data Interchange (EDI) and Application Programming Interface (API) integration, offering incentives for meeting the EDI requirements.

EDI Integration: Amazon Vendor Central VS Seller Central

Amazon Vendor Central is for manufacturers and wholesalers who sell products to Amazon, letting Amazon handle listings. Amazon Seller Central is for third-party sellers who list, sell, and manage their own products on Amazon's platform.

Integrating both Amazon Vendor Central and Amazon Seller Central is crucial for businesses seeking to maximize their presence on the platform. This synergy allows manufacturers and wholesalers to control their own product listings, pricing, and promotions while also benefiting from Amazon's vast customer reach and fulfillment capabilities. It fosters a comprehensive Amazon strategy, driving increased visibility, sales, and customer satisfaction, ultimately leading to greater business success on the platform.

Will Amazon EDI Integration Benefit You?

If you answer "yes" to any of the following questions, it's a clear indication that EDI integration could significantly benefit your company. Take a moment to consider:

1. Do you spend more than ten hours a week on order processing?
2. Do you spend more than ten hours a week on shipment creation?
3. Do you spend more than five hours a week on invoice creation?
4. Do your sales to Amazon Vendor exceed $1 million per year?
5. Do you view Amazon Vendor as a key growth channel for sales and revenue in the next five years?
6. Do you want to automate, streamline, and consolidate processes related to order handling?
7. Do you wish to reduce paperwork, touchpoints, and handling time for orders to Amazon?

To propel your business to new heights in the months and years ahead, assessing if your current workflows involving people and documents align with your sales goals is crucial.

While focusing on listing optimization and advertising cost of sale (ACoS) is important, it's equally vital to consider their impact on your warehouse and financial operations. Neglecting chargebacks and hidden costs can eat into your profits and lead to unexpected expenses. Without integration, your workflow becomes a bottleneck, necessitating increased manual labor and other methods to maintain systematic operations.

However, it's important to note that integration is not a "magical" solution. It does have its limitations. Some of these include:

• Catalog Management: Integration won't allow you to create, upload, or edit your catalog directly
• Stock Updates: You can only update your stock status once every 24 hours.

Avoiding the Top 3 Amazon Vendor EDI Chargebacks:

Here are three essential EDI compliance factors: ASN, Routing Request, and Delivery Chargebacks for Amazon vendors.

• ASN Chargebacks: FBA vendors must send ASN promptly; delays or errors lead to chargebacks.
• Routing Request Chargebacks: Accurate routing requests are crucial for order processing; non-compliance results in chargebacks.
• Delivery Chargebacks: Timely delivery is a must; late deliveries incur penalties.

> Explore our EDI integration platform for Amazon compliance.

Amazon EDI Transactions: What Can and Cannot Be Exchanged Over EDI?

Six key message types are commonly utilized by Amazon vendors. Let's explore each of them with some context to understand the significance of these EDI transactions:

• EDI 850 - Purchase Order:
  • This document is used by Amazon to place orders for products from vendors.
• EDI 855 - Purchase Order Acknowledgement:
  • Vendors utilize this message to acknowledge the receipt and acceptance of the purchase order from Amazon.
• EDI 810 - Invoice:
  • Vendors generate this document to provide Amazon with an invoice for the products shipped or services rendered.
• EDI 846 - Cost Inventory Update:
  • This message is crucial for vendors to update Amazon with the latest information about costs and inventory levels.
• EDI 753 - Routing Advice Request (ARN):
  • Vendors utilize this document to request routing advice from Amazon, which helps ensure accurate and timely delivery of goods.
• EDI 856 - Advance Shipping Notice (ASN):
  • This message allows vendors to provide Amazon with advanced notification about shipments, including details such as tracking numbers and delivery dates.

However, it's important to note that there are certain limitations to the information you can transmit to Amazon Vendor via EDI. Currently, you cannot transmit the following:

●  Product creation
●  Product details, including images, features, and descriptions
●  Price change negotiations

For vendors looking to streamline their operations, EDI integration is the go-to solution. By implementing EDI, you can seamlessly download purchase orders to your system and send invoices to Amazon. Numerous EDI integrators are available to assist you with this process.

Which Way Should You Integrate with Amazon - EDI or API?

When it comes to integrating with Amazon Vendor Direct Fulfillment, there are two options available through your vendor account. Amazon will provide you with a separate Vendor code, which you can use to register and connect your Vendor Direct Fulfillment account to your internal systems. Now, the question is, which option should you choose - EDI or API.

Amazon EDI Integration: With this method, you utilize EDI to transmit XML messages for orders and acknowledgments. If you already have an existing EDI process, you can expand it to include Vendor Direct Fulfillment. However, if the message format and contents differ from your existing EDI setup, you may need assistance from your developers.

Amazon API Integration: Introduced by Amazon in Q3 2020, this is a new approach that requires setting up an API connection. API stands for Application Programming Interface and serves as a standard integration method, much like EDI, facilitating communication between two applications. Unlike EDI, which connects two EDI systems, API is a web-based protocol that enables different systems to connect.

To delve deeper into the pros and cons of both EDI and API integration methods, refer to the table provided below.
 

What if Your ERP Can't Do APIs or EDI?

Enterprise Resource Planning (ERP) systems are crucial tools for businesses to manage various aspects of their operations, from finance and HR to manufacturing and supply chain. However, ERPs often vary widely in their capabilities and compatibility when it comes to integrating with other systems, like third-party software, suppliers, or customers. In some cases, ERPs might not meet the needs of your Amazon business. And simply will not support direct communication through methods like APIs or EDI (Electronic Data Interchange), making it necessary to find alternative ways that may include web services, migrating ERP systems, or ERP integration.

One common workaround is to utilize file-based integration using formats such as CSV (Comma-Separated Values) or XML (Extensible Markup Language) in conjunction with secure file transfer protocols like SFTP (Secure File Transfer Protocol) or FTP (File Transfer Protocol) servers. Here's an expanded explanation of this approach:

Understanding ERP Capabilities: The first step is to assess your ERP system's capabilities. Your IT team should investigate what data input and output options are available within the ERP. Different ERP systems like Netsuite, Oracle, Sage, or others have varying levels of flexibility when it comes to data exchange.

Limitations of ERPs: Some ERP systems may not support modern integration methods like APIs or EDI. This limitation can be due to the age of the system, lack of specific modules, or the ERP's architecture. This can make direct integration with external systems or partners challenging.

Sometimes, ERPs aren't equipped to directly communicate through APIs, nor EDI, but they can work with CSV or XML formats using SFTP or FTP servers. Not to worry, you can still find a solution with the help of a third-party interface. No matter the ERP system: Netsuite, Oracle, Sage, etc., the right integration interface will seamlessly enable connections.

Just have a chat with your IT team to figure out what inputs and outputs your ERP can handle. Then, reach out to an EDI/API provider and see if they can hook you up with a middle-man interface.

What Are the Amazon Vendor Central EDI Requirements?

The main Amazon Vendor Central EDI requirements you need to be aware of are: 

Obtain a Vendor Central account and request access to the EDI Self-Service Startup by logging in and contacting the Amazon Administrator.

1. Complete Vendor Central's self-service survey to establish a connection with Amazon. The survey requires specific information, including:
   • Product IDs and Measurement Codes: Choose the appropriate product identifiers and measurement units for accepting Amazon orders.
   • Sender/Receiver IDs: Obtain the necessary Qualifier and ID numbers for verifying EDI documents.
   • Item Information: Provide details about test items, such as in-stock, discontinued, invalid, or backorder items, along with Cost, Item Price, and Case Quantity.
   • Connection: Specify the type of connection you want to establish between your systems and Amazon Vendor Central, such as AS2, Amazon-Hosted SFTP, or a Value-Added Network (VAN).
2. Prepare the required EDI documents for Amazon Vendor Central, including:
   • Purchase Order EDI 850: Contains order details, items, shipping location, and methods.
   • Purchase Order Acknowledgement EDI 855: Shows the status of shipped products, including acceptance, rejection, or changes.
   • Shipment EDI 856: Lists the shipped products, package IDs, tracking data, bill of lading, and other shipping information.
   • Invoice EDI 810: Includes product prices, payment terms, and remit-to address for payment processing.
   • Inventory EDI 846: Provides pricing and inventory storage units for sale to Amazon.

To further automate your Amazon Vendor workflow, consider including additional EDI documents such as a request for routing instructions, inventory inquiry/advice, product activity report, purchase order change request, and purchase order change request acknowledgment. Lastly, complete the survey in Vendor Central to submit each document and test them within the portal for a seamless EDI integration experience.

How to Integrate Amazon EDI Effectively with Your Backend Systems

To effectively manage Amazon orders and avoid costly issues stemming from delayed or inaccurate data entry, it is crucial to establish a reliable and efficient integration system between EDI and your backend ERP, eCommerce, and logistics systems. Failure to do so can result in significant charges, such as:

●  Delayed PO Acknowledgments or POA Modifications: Penalties of 1% of the cost
●  Delayed ASN Documents: Charges ranging from $5 to $150
●  Non-Compliant ASNs: Penalties ranging from 2% to 6% of the incurred cost

Considering that web retailers typically operate on net margins of 0.5% to 3.5%, these additional costs can eat up a substantial portion, ranging from 25% to 200%, of your potential net profit.

To mitigate these risks, it is advisable to utilize a Connector that enables seamless integration. Such a connector facilitates the automation of critical transactions between Amazon Vendor Central and your backend systems, ensuring secure cash flow and data exchange.

When selecting a Connector, look for the following capabilities:

• Accurate item and catalog information transmission to Amazon via EDI
• Reliable and compliant AS2/EDI interactions with Amazon
• Prevention of SLA violations and associated costly charges due to non-compliant EDI or inaccurate data
• Automation of ASNs, POAs, and other essential operations

By prioritizing these considerations, you can establish a robust integration framework that safeguards your operations and helps maximize your profitability.

How Much Does Amazon Vendor Integration with EDI Cost?

The importance of this aspect in your Amazon Vendor integration cannot be overstated. It primarily relies on the system you are integrating with and the level of streamlined functionality you desire.

If you have a basic ERP and only require the ability to download purchase orders, you can expect to set it up at a cost ranging from three to four figures. However, for a more sophisticated integration involving extensive information exchange, the budget may reach four or five figures.

In the case of large organizations with a global presence and multi-system integration requirements, the budget can extend to six figures.

How Long Does Amazon Vendor Integration with EDI Take?

The time required for integrating your Amazon Vendor account varies based on factors such as the systems involved, the volume of information to be exchanged, and the complexity of the integration.
The actual integration process with Amazon itself is relatively quick. However, the time consumed largely depends on the interface with your ERP system, which may extend the timeline. The setup period can range from as little as two weeks to as long as three months, depending on the specific requirements of organizations and marketplaces.

Where Should You Start with Amazon Vendor Integration?

1. Assess Your Operations
Begin by examining your current operations and gathering your administration and finance teams to discuss the key challenges you're facing. Identify the specific issues you need to address, determine the desired solutions, and establish your ultimate goals. One effective solution is integrating with EDI, which streamlines processes like downloading and accepting purchase orders (POs), creating Advanced Shipping Notices (ASNs), and generating invoices.

2. Determine the Urgency, Budget, and Timeline: 
Evaluate the level of urgency for the integration project. Is it an essential requirement or a nice-to-have addition? When do you need it? Who will benefit from it?

3. Conduct Research
Explore your options. Would you prefer an off-the-shelf integration provider, or do you require a more customized solution? Look for demos and presentations from various service providers. Observe how their systems operate and analyze whether their solutions align with your business model and specific needs.

Can You Set Up Amazon Vendor Integration on Your Own?

While you may not necessarily need a software partner for EDI integration with Amazon, you should possess knowledge of how to handle EDI messages within your internal systems. Additionally, you must be able to accept and export these messages from your ERP system.

Considering a Third-Party Solution for Your Amazon EDI Integration

If you lack the necessary resources or expertise to integrate and manage Amazon EDI, considering integration software may be your next step, or exploring a third-party EDI integration solution. 

Providers should have expertise in web EDI, integrated EDI, reporting, and automation in order to help minimize disruptions to their workflow during the Amazon EDI integration process.

Best Practices for Successful Amazon EDI Integration

To ensure a smooth EDI integration process with Amazon Vendor Central, consider these four best practices:

1. Select a trusted EDI provider that has experience working with Amazon Vendors.

2. Collaborate closely with your EDI provider to ensure your system meets Amazon's EDI requirements.

3. Integrate EDI with your Order Management System (ERP/CRM) to automate order reception and processing.

4. Continuously evaluate and optimize your EDI integration to meet your business needs and remain compliant with Amazon's requirements.

To avoid unnecessary delays, costs, and errors are guided by certain overarching best practices in B2B EDI integration.

Cleo's Proven Amazon EDI Solution

At Cleo, we have extensive experience in EDI integration and are dedicated to assisting businesses with integrating their systems seamlessly with Amazon Vendor Central. We understand the challenges involved and offer a complimentary initial consultation to ensure you begin on the right track. 

One of Cleo's unique offerings is our Amazon API connectors that accelerate integration times by eliminating integration development from scratch. Our Amazon connectors enable users to customize and tweak prebuilt templates until they comply with your and Amazon's business requirements. Cleo offers two connectors that can help integrate your digital ecosystem into your Amazon eCommerce store, Salesforce-Amazon, and NetSuite-Amazon.

Additionally, our flagship product, Cleo Integration Cloud (CIC) provides users with the following benefits when it comes to EDI integration:
● End-to-end visibility
● Rapid trading partner onboarding
● Flexible service offerings—self-service, managed services, or blended services
● Quick error resolution
● Business process automation
● Scalability
● …and more

Watch a 3-Minute Demo Video orAmazon EDI Integration Solutions

Final Thoughts

In conclusion, integrating EDI with Amazon Vendor Central offers benefits such as streamlined operations, reduced errors, real-time updates and in-depth views of all ordering processes, and increased efficiency. Furthermore, advanced integration capabilities to Amazon Vendor Central offers numerous advantages including automation, seamless operations, and scalability. 

Contact us today at sales@cleo.com or +1.815.282.7695 to leverage our expertise and start experiencing the advantages of EDI integration. And be sure to explore some of our educational resources through our resource library.