What is EDI?

EDI stands for Electronic Data Interchange and is the electronic communication of business transactions between suppliers and retailers. Purchase orders, confirmations, invoices, shipping updates—these and many other transactions can be handled by EDI.

What does EDI do?

EDI replaces transactions and basic communications once done with paper or fax—remember those?—with electronic transmission.

There are all kinds of EDI documents—some retailers will use a lot of them, others will rely on just a few. But the process typically begins when the buyer at a retailer creates a purchase order digitally using a document called the EDI 850 (EDI 875 in the Grocery category). This starts the exchange of EDI documents that provide information including order acknowledgements, shipping details, invoicing, and more.

Cost-effective cloud-based EDI software solutions allow companies of all sizes to meet the EDI requirements of their trading partners, without making a major investment in costly hardware or additional personnel.

Infographic about EDI process

How EDI Works

Trading partners transmit EDI documents when they want to order items from a brand or supplier. Depending upon the compliance standards of the retailers, documents will be exchanged throughout the process—acknowledgement of the order, a notice about a shipment, an inventory update, an invoice, etc. Specific documents are required at certain times, according to the compliance standards of the retailer.

Pros and Cons of EDI


  • Saves time and money through automation
  • Improves efficiency and productivity
  • Reduces errors by ensuring that information and data are correctly formatted
  • Improves traceability and reporting because electronic documents can be integrated with other systems
  • Supports positive customer experiences and enhances business relationships


  • Can be tedious and time-consuming
  • Prevents companies from focusing on growth opportunities
  • Can result in errors and costly chargebacks
  • Requires adhering to different compliance standards with multiple trading partners
  • Creates significant infrastructure and resource costs if an in-house solution is employed

The Value of a Responsive EDI Provider

Not all EDI providers and platforms are equal. Not only is our Lingo™ software robust and intuitive, we back it with an expert customer support team that resolves issues quickly. When you need to move orders, we’re here to help make sure it happens.

Let’s talk EDI, online order processing, and system integrations.