Dropshipping can be a complex business model, especially when it comes to dealing with suppliers and data.
Electronic data interchange (EDI) allows you to automatically exchange data between your eCommerce site, suppliers, and customers.
Processing data with EDI can significantly speed up your business, but you’ll handle several different EDI documents as a dropshipper.
With over 55 EDI codes and documents, it can become challenging to understand which ones you need to use to streamline your operations.
In this article, we’ll discuss the benefits of using an EDI document called EDI 945 Warehouse Shipping Advice and how it’s used in dropshipping.
What Is EDI 945 Warehouse Shipping Advice?
As a dropshipper, you work with suppliers to store and ship goods to your customers. Those suppliers will send you an EDI 945 Warehouse Shipping Advice document to tell you they’ve shipped goods to your customers.
This report also verifies that shipment quantities match order quantities, so you know that customers will receive what they paid for.
In the past, suppliers had to manually send shipment confirmation letters via fax or email, potentially leading to a break in the supply chain. Fortunately, a third-party logistics provider (3PL) can automatically send an EDI 945 when goods leave their remote warehouses.
You can then take the tracking number from the EDI 945 and give it to your customers so they know where their order is at all times.
What Are the Components of EDI 945?
Each EDI 945 is different, but they usually include:
- Date and time.
- A shipment identification number.
- Payment information.
- Delivery address.
- Sending address.
- Dropshipper contact information.
- Transportation methods, like air freight.
- Carrier details and shipping service level.
- Product cost.
- Product name.
- SKU.
- Quantities shipped.
- The total number of goods shipped in the order.
How Is EDI 945 Used in Dropshipping?
These are the steps that you’ll go through using EDI 945 as a dropshipper:
- Start the fulfillment process: To begin the order fulfillment process, you’ll send your 3PL an EDI 850 Purchase order. When the warehouse receives the EDI 850, it will reply with an EDI 855, which acknowledges your order.
- Shipping details are verified: Internally, the warehouse generates an EDI 940 Warehouse Shipping Order. When the warehouse ships the order, it sends you an EDI 945 to verify the shipping details. Depending on the supplier, it might also send an EDI 856 Advance Ship Notice.
- Receiving the EDI 945: After your system receives the EDI 945, you’ll reply with an EDI 997 Functional Acknowledgement, which tells the shipper that you received the EDI 945.
EDI 945 matters to dropshippers because it provides a tracking number. You can use a platform like Spark Shipping to automatically share that tracking number with customers to improve their experience.
EDI 945 will also tell you if your 3PL had to change your order. It will explain if there were any out-of-stock products or substitutions on the order.
Additionally, EDI 945 is used by a warehouse to advise you that the shipment was made and to reconcile order quantities with shipment quantities.
The Benefits of Using Electronic Data Interchange
Without EDI, you would have to communicate with your suppliers over the phone, email, and text. That may lead to delays and errors in your business, so EDI is a must to streamline any dropshipping operation.
The EDI 945 document type is helpful because it:
✅ Improves order accuracy
The last thing you want to do is send customers the wrong product or the wrong number of products. EDI verifies that the 200 shoes the 3PL shipped match the order for 200 shoes.
✅ Saves time
When using EDI, there’s no need to mail or fax anything to your suppliers. Your systems are integrated, so all transactions happen almost immediately. That means your customers get their tracking information faster, a great way to enhance their experience.
✅ Reduces errors
EDI 945 verifies that your order matches what the supplier shipped. Plus, everything is documented in writing, so you never have to worry about misunderstandings or errors between you and your supplier.
An EDI 945 Example
EDI documents contain many elements that are often hard to break down because they’re designed for machines, not people. However, if you’re trying to find information in an EDI 945 document quickly, these are some of the most common data contents:
➡️ W06: Warehouse shipment identification number
This provides information identifying the shipment, including details like the shipment date and status.
➡️ N1: Name
This part of the document identifies all the parties associated with the shipment using standardized codes. These parties could be the ship-to or bill-to parties.
➡️ N9: Reference identification
This section is used for any additional reference numbers or identification details like purchase order numbers.
➡️ G2: Date and time
These are the details of the relevant dates and times for the shipment.
➡️ W27: Details about the carrier
The carrier is identified, and any related transportation information, such as carrier codes and the method of transport, is included.
➡️ LX: Assigned number
This marks the start of a transaction with a set line number.
➡️ QW2: Warehouse item detail
All your product details about the items being shipped are detailed, including quantity shipped, condition, and item identifiers.
➡️ W03: Total shipment information
This part of the document summarises the shipment details, including weight, volume, and quantity totals.
Take the Hassle Out of Dropshipping with EDI 945 and Spark Shipping
Managing a dropshipping business is challenging, but EDI can streamline your operations by automating supplier communication.
Typically, setting up EDI can be time-consuming and complex. But with Spark Shipping, we handle everything for you, including setup and automation, so you can focus on growing your business.
By automating EDI, you’ll reduce errors, enhance supplier relationships, and deliver a seamless customer experience.
Book a free Spark Shipping demo today to see how our platform can transform the way you do business.