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As a dropshipper, you act as the middleman between your trading partners and your customers.
It’s simple enough to manage orders when your business is still small. But as you grow, you’ll need a way to deal with the massive amount of data that comes with running a dropshipping business.
Instead of managing everything yourself—or hiring more employees—you can use electronic data interchange (EDI) to automate everything. Why? Because automation is the smartest way to do business.
Electronic data exchange allows you to integrate with your suppliers’ systems and exchange information automatically. No calls, no emails, no texts. Just results.
If you’re a dropshipper, the chances are you’ll see certain EDI documents more often than other businesses. EDI 846 is the most-exchanged document type in dropshipping.
In this article, we’ll cover everything you need to know about EDI 846 Inventory Inquiry Advice documents.
What Is EDI 846 Inventory Information?
EDI 846 is the most common document exchanged between eCommerce site owners and their trading partners.
This EDI document is an electronic version of the paper-based inventory updates that suppliers and dropshippers once had to fax or email to each other every day.
While most EDI documents are used only by one party, EDI 846 is unique because both suppliers and dropshippers can use it.
Dropshippers submit an EDI 846 to ask their suppliers about available inventory levels.
Suppliers send EDI 846 to provide inventory data to dropshippers that indicates how many units they have available right now and how many they’ll have in the future.
What Are the Components of EDI 846?
The exact format of an EDI 846 will vary depending on the dropshipper and supplier, but they usually include these data points:
- Date and time
- Retailer ID number
- SKU or UPC
- Part description
- Inventory location identification
- One seller's location
- Product units
- Discontinued products
- Item descriptions
- Backorder quantities
- Committed quantities
- Restock dates
How Is EDI 846 Used in Drop Shipping?
Even though you have complete control over your eCommerce website, you’d need to know how many products your supplier has in stock.
Without this information, you risk selling out-of-stock products—which could be detrimental to your business and your profit margins.
With solutions like Spark Shipping, you can automatically sync supply inventory information from your EDI 846 with your eCommerce website.
This way, shoppers always see accurate inventory information. Because inventory changes by the hour, it’s common for dropshippers to request this information from trading partners multiple times a day.
If you receive an EDI 846 from a supplier, they’re in effect letting you know about their product availability.
Not only will you see current inventory levels, but you’ll also receive data about which products are out of stock or discontinued.
Additionally, many EDI 846 documents will inform you of future inventory availability. In other words, you’ll get information about when a product will be back in stock or when a newer version will become available.
If you know that your supplier will be low on stock in two months’ time, it gives you enough time to find a backup supplier or make alternative plans for your online store.
The Benefits of EDI 846 for eCommerce Businesses
By far, the biggest benefit of using EDI 846 is that it automates setting your stock levels.
There’s no need to call or email your suppliers multiple times a day asking them to communicate inventory information.
But EDI 846 also has four other major benefits for dropshippers:
➡️ Increased accuracy
You don’t want to sell products that are out of stock. This can potentially lose you loyal customers and cost you new sales.
You can ensure that the inventory numbers on your website are as accurate as possible by feeding EDI 846 data into your eCommerce store. This will provide accurate information and eliminate costly errors.
➡️ Improved customer satisfaction
Shoppers can easily choose to buy your products from other sellers, so you need a competitive advantage.
Fortunately, EDI 846 ensures customers have the best buyer’s experience possible, which increases shopper loyalty.
➡️ Run a better business
As a dropshipper, you’d want to know about potential stock issues as soon as possible. Reputable suppliers will warn you about potential inventory shortages months in advance through an EDI 846.
If you use a solution like Spark Shipping, you can route your purchase orders (POs) to the cheapest in-stock supplier for every order, which helps you simultaneously reduce costs and orders for out-of-stock products.
➡️ Get up-to-date information
When both trading partners and eCommerce store owners are on the same page, both benefit from access to up-to-date data, which means business operations run far smoother than ever before.
An EDI 846 Example
EDI documents are designed for machines, not people.
When you look at an EDI 846 document, you’re looking at raw data that might not make a lot of sense.
With EDI solutions like Spark Shipping, you can translate and map all this data, so there’s no need to try and interpret it yourself.
If you’ve never seen an EDI 846 before, here’s an example:
EDI Mistakes to Avoid
If you’re an eCommerce business owner using EDI, here are some mistakes to avoid:
❌ Inconsistent updates: You should do everything you can to keep your suppliers up to date by providing frequent EDI 846 updates.
❌ Delayed responses: Always respond to EDI 846 notifications from your trading partner. Timely responses are essential to maintaining a smooth supply chain.
❌ Failing to integrate your EDI: Not integrating EDI with your eCommerce platform can lead to all kinds of errors and delays.
❌ Poor communication: The purpose of EDI is to maintain good communication. Be sure both you and your trading partners understand what is required in terms of the frequency of updates.
❌ Setting up your EDI incorrectly: You won’t reap the rewards of automation if you get this step wrong.
How Spark Shipping Helps with EDI 846
To run a successful dropshipping business and keep your customers happy, you’ll need to exchange data with your suppliers multiple times a day.
Historically, that meant having to deal with a lot of data manually. Electronic data exchange makes it possible to pull inventory levels into your eCommerce store automatically and keep everything running smoothly.
If you’re not using EDI in your eCommerce business, you’re missing out on a big opportunity that could save you significant time and money.
However, setting up EDI can be challenging as there are so many different components to get right. In fact, most dropshippers give up on setting up EDI simply because it’s too complex.
However, when you partner with Spark Shipping, we’ll implement and automate every aspect of EDI for your business. Working with us means your data exchange will become completely seamless and you can eliminate the risk of encountering costly and time-consuming hiccups along the way.
If running smooth operations, satisfying your customers, and driving more sales are what you want to achieve, visit our website. We’ll give you a free Spark Shipping demo so you can see the difference automation can make to your business.