At some point evaluating ordering software, you'll come across EDI — Electronic Data Interchange. It sounds authoritative. "Real" businesses use EDI. Before you go down that road, here's what EDI actually is, who needs it, and why most distributors in the $1M to $20M range will never need it.
What EDI Actually Is
Electronic Data Interchange is a standardized method for businesses to exchange documents — purchase orders, invoices, shipping notices — in a machine-readable format without human intervention. Instead of your buyer emailing you a purchase order, their system sends a structured electronic file directly to yours using a set format like ANSI X12 or EDIFACT.
EDI was developed in the 1960s and became the standard for large-scale retail procurement. When Walmart sends a purchase order to one of their suppliers, they use EDI. The documents flow automatically from one enterprise system to another.
Who EDI Is Actually For
EDI makes sense when: a large retail partner requires it as a condition of doing business, you're processing 500+ orders per day from enterprise customers with their own ERP systems, you have a dedicated IT team and budget for implementation, and you can absorb $10,000 to $50,000 in setup costs plus $500 to $2,000/month in ongoing fees.
The Real Problems with EDI for $1M-$20M Distributors
Setup cost and complexity. EDI implementation requires mapping your products and processes to standardized formats, setting up a Value Added Network (VAN) or AS2 connection, and often hiring an EDI specialist. Realistic setup costs start at $10,000 and commonly reach $30,000 to $50,000.
Your clients don't have EDI systems. For EDI to work, both you and your trading partner need to be EDI-capable. Most of your wholesale accounts — restaurants, specialty retailers, small grocers — have no EDI capability and no interest in developing it.
It doesn't solve your actual problem. Your problem is that ordering is manual, time-consuming, and error-prone. EDI solves a different problem: automating document exchange between enterprise systems.
Maintenance is ongoing and expensive. Every time a trading partner updates their EDI specifications, you need to update your mapping. Every new trading partner requires a new setup.
What a B2B Portal Gives You Instead
Your clients don't need any technology. They just need a web browser and a login. A restaurant manager with an iPhone can place an order in 90 seconds.
Setup is measured in days, not months. A purpose-built B2B portal for distributors can be live with your products, pricing, and accounts loaded in 10 to 14 days. Not 6 months and $30,000.
Per-account pricing is native. In an EDI system, pricing variations require complex configuration. In a B2B portal, assigning different price tiers to different accounts is a basic feature built for exactly this purpose.
When You Might Actually Need EDI
There is one scenario where EDI becomes relevant: when a major retail partner explicitly requires it as a condition of doing business. If you land a regional grocery chain and they tell you their purchasing system is EDI-only, then you need to implement EDI for that specific relationship — while running a B2B portal for everything else. EDI is not an all-or-nothing system.
But that decision gets made when a specific partner requires it — not proactively as a general infrastructure investment.