Dropshipping business works so much better with EDI – here’s why…and how

The future of dropshipping is here. Reap the benefits of electronic document exchange and streamline your entire dropshipping process.

In our digital world, dropship EDIEDI stands for Electronic Data Interchange. It is a standardized method for exchanging business documents electronically between different computer systems in a structured format. EDI enables the automated exchange of documents such as purchase orders, invoices, and shipping notices between trading partners, helping to streamline and automate business processes. solutions are playing an increasingly important role in the retail sector. One of the biggest challenges for e-commerce businesses is being able to manage inventory, pricing and shipping. Dropship EDI solutions provide a way for retailers to optimize their connections with suppliers who can most efficiently fulfill their order demands.

If you’re looking for ways to grow your dropshippingDropshipping is a business model where an online retailer (the dropshipper) sells products to customers without keeping the inventory in stock. Instead, when a customer places an order, the retailer places an order for  the product with a third-party supplier or manufacturer who ships it directly to the customer. The dropshipper (the online retailer) acts as an intermediary, handling the sales and customer service aspects while relying on the supplier to fulfill orders and handle the physical product storage and shipment. This allows the dropshipper to operate without the need for upfront inventory investment or fulfillment logistics business, implementing an EDI solution is a great place to start.

The evolution of the dropshipping business model

In the past, dropshipping businesses would source products from a single supplier and then ship those products to customers.

However, this business model has evolved in recent years. Now, dropshipping businesses often source products from multiple suppliers, allowing them to offer a broader range of products to their customers.

Even though it has been around for some time, dropshipping has been in the spotlight recently for three principal reasons: competitive advantage, the growth of the e-commerce industry and the increasing trend for customers to make their purchases online.

In order to keep pace in this competitive e-commerce world, many businesses are using the dropship model. Amazon has set a high standard by providing two-day delivery and consequently other retailers are feeling the pressure to compete with this tight deadline.

The e-commerce industry is absolutely booming — it reached $5.8 trillion in revenue in 2023.

E-commerce businesses have been impacted by COVID-19 often positively due to an increase in customers. Some companies noted a 2-3x increase in online ordersORDERS (Purchase Order): The ORDERS message is used to convey a request for goods or services from a buyer to a seller. It includes information about the items requested, quantities, pricing, delivery details, and any other relevant terms and conditions. The ORDERS message serves as an official document for initiating the purchase process., and their suppliers have often had to adapt to help fulfill this order influx. For businesses struggling with lockdowns, dropshipping has allowed them to continue their business.

How can EDI dropshipping boost your business, and is it worth the investment?

Dropshipping is one of the most popular online business models today. And no wonder — it is easy to set up and manage, and it doesn’t require a large investment.

But as your dropshipping business grows, you’ll need to start thinking about automating your processes — and this is where EDI comes in.

EDI, or electronic data interchange, is a system that allows businesses to exchange data electronically. In the context of dropshipping, EDI can be used to automate your order management process, from placing orders with suppliers to receiving inventory updates and tracking shipments.

Using an EDI dropship supplier also helps you save on delivery costs and shipping times because you don’t have to wait for your inventory supplier to ship the goods to you. Nor do you t need warehousing space, since the goods are delivered directly from the supplier to the end customer.

EDI dropshipping has many benefits for businesses, including:

Lower costs for you – significantly reduces your operating costs by removing the need for you to hold stock and the need to pay for a warehouse to keep it in.
Faster to market – new products can be added to your catalog and price list immediately after they become available from your manufacturer because shipping will be direct to the end customer.
Faster fulfillment – your incoming orders will be routed directly to your manufacturing supplier and they in turn, will ship directly to the end user. This means the customer receives their purchase without the delay of the product passing through your warehouse, thereby improving customer satisfaction levels.

With all these streamlined and efficient processes, you are not only making your job easier but also the job of your suppliers, making you a more desirable business partner.

EDI dropshipping is definitely worth considering for any business that wants to streamline its inventory management process. It offers many benefits and can help you save time and money in the long run.

The benefits of both EDI Managed Services and iPaaS for dropshipping businesses

There are many benefits of using EDI Managed Services and iPaaS solutions in your dropshipping business. It can save you a lot of time and effort by automating repetitive tasks, helps you avoid errors that can cost you money and keeps track of your inventory levels so you minimize stock outages. Your individual business strategy and the stage you are at in your growth will probably determine which model works best for you. Many dropship businesses start small and grow quickly using SaaSSaaS means Software as a Service. It is a software distribution model where applications are hosted and provided to customers over the internet. Instead of installing and maintaining software on individual computers or servers, users can access and use the software through a web browser. SaaS eliminates the need for local installations and allows for easy scalability and remote access. or other cloud-based applications for orders, invoicing, etc and they do not see the need to invest in any significant in-house IT resources. For these customers, or larger customers who do not want to have a hands-on approach to IT management, then a Managed ServicesManaged Services refer to outsourced services provided by a third-party vendor or service provider to handle and manage specific aspects of an organization’s operations or technology infrastructure. These services are typically delivered under a service-level agreement (SLA) and can include activities such as EDI services, IT support, network management, data backup, security monitoring, and more. model will be ideal. For businesses who already have an in-house IT capability and who want to retain a closer degree of hands-on control, then iPaaSiPaaS means Integration Platform as a Service. It is a cloud-based platform that facilitates the integration of different applications, systems, and data sources within an organization. iPaaS provides pre-built connectors, data transformation tools, and workflow capabilities, enabling businesses to create seamless data flows and integrate various applications without the need for extensive coding or infrastructure management. will fit perfectly. Many of the same advantages will be delivered by either model.

Automate data exchange
Automating the exchange of business documents with EDI can help dropshipping businesses to improve efficiency and accuracy. By using iPaaS to connect their ERPERP means Enterprise Resource Planning. It refers to a suite of integrated software applications that organizations use to manage and automate their core business processes. ERP systems typically include modules for finance, human resources, supply chain management, inventory control, and other functions, providing a centralized database and facilitating the flow of information across different departments. system with their e-commerce platform, businesses can automate the process of exchanging orders, invoices, and other documents.

Reduce costs
Using EDI and iPaaS solutions can help dropshipping businesses save money. The cost of manually processing paper documents can be high, particularly for businesses that deal with large volumes of orders. Automating the process with EDI can help to reduce these costs.

Increase sales
Businesses that use EDI and iPaaS solutions are able to take advantage of automated order processing. They can also increase their sales volume without having to hire additional staff or purchase additional resources.

Improve customer satisfaction
A key benefit of using EDI and iPaaS is increased customer service levels across the board. When dropshippers automate the process of sending out invoices and processing payments, they are able to respond much faster to customer requests.

Improve competitiveness
EDI and iPaaS solutions also give small business owners valuable insights into their sales and marketing activities. They can make more informed decisions about pricing, packaging and product lines to maximize profits.

Choosing the right EDI Managed Service or iPaaS solution for your business

As the e-commerce industry continues to grow, so does the need for dropship EDI solutions. But with so many options on the market, how do you know which one is right for your business?

The key is to find an EDI solution that is scalable, flexible, and simple to implement and use. This way it gets you started as quickly as possible and it can still grow with your business. Here are a few things to look for when choosing a dropship EDI solution:

Integration with your existing systems
Ensure that the EDI solution you choose can integrate with your existing accounting, order management, and other business or ERP systems. This will make it easier to manage your order and invoicing processes, and avoid any disruptions to your business operations.

Scalability
As your business grows, you’ll need an EDI solution that can scale with you and you retain the ability to easily add more users or increase storage capacity as needed.

Flexibility
Your business needs will change over time, so it is important to find an EDI solution that is flexible enough to adapt to those changes. Look for a solution that offers a variety of integration options, so that you can easily connect your existing cloud provision or in-house IT infrastructure to the EDI system.

Take your dropshipping business to the next level with Omnizon

If you are already running a dropshipping business or planning to start one, you can appreciate the huge advantages of having a great EDI solution in place. It can help you automate your order processing and invoicing, saving you a lot of time and money. If you have yet to choose an EDI solution or you feel that the one you are currently using isn’t bringing you all of the benefits described above then we can help.

We have been in the EDI industry for many years, and have helped numerous companies transform their business processes. We are confident that we can provide you with a solution that will meet the needs of your dropshipping business, so feel free to contact us anytime — whether you are looking for a reliable solution or just some expert advice.