Hoping to sell your products through Target? Step one: become EDI capable and meet Target EDI requirements.
Electronic Data Interchange (EDI) is a technology that allows businesses to communicate and share information electronically. EDI data framework is standardized so all your trading partners will resemble Target’s requirements but document types and formats may vary from retailer to retailer.
EDI has become an essential part of ecommerce, especially when it comes to working with large retailers like Target.
To keep up with the competition and maintain customer satisfaction, businesses must be able to process orders quickly and accurately. While EDI + automation can offer many benefits, EDI is also a mandatory requirement to sell through most offline retailers (including Target).
In this article, we’ll discuss how you can become EDI compliant and meet Target EDI requirements so you can begin selling through Target stores and Target.com.
This article will help you understand what EDI is and how you can go about becoming Target EDI compliant. Once you’re up-and-running with Target, adding EDI connections to other brick and mortar retailers or ecommerce sales channels will be easy.
What is EDI?
EDI (Electronic Data Interchange) is a method to electronically exchange transaction information between Suppliers/Vendors and Buyers, Trading Partners, and Retail Chains.
EDI replaces manual and analog processes (e.g. email, PDFs, and faxes) allowing you to send Purchase Orders, Inventory, and Shipping data. Many large retailers require EDI to do business as it reduces errors and increases the accuracy of their business transactions. Additionally, EDI compliance makes it easier to exchange documents in a secure and consistent manner. Every trading partner has its own EDI requirements that they’ll provide to a supplier.
systems, such as purchase order information, inventory counts, and shipping and fulfillment data.
With it, you can automate manual tasks and make sure your data is accurate across platforms.
How Does EDI Work?
The whole EDI process begins with two companies agreeing to use EDI as their main method of data exchange. Many large retailers require this, and some even require the use of a fully integrated EDI software solution like Syncware.
Next, the two companies must establish a secure connection between their systems so that all data sent is encrypted and protected from unauthorized access.
In most cases, you can set up an EDI integration through a 3rd party vendor, and they usually offer automation for other business processes as well.
Once this connection has been established, each company can begin sending documents between its own system and that of its trading partner.
The documents are then validated against a set of standards and protocols to ensure that the information contained in them is accurate and complete. EDI has been around since the 1970s, and standardization helps all businesses “speak the same language” when sending documents and data.
Once this validation process is completed, the documents are sent back and forth between each company’s system until all necessary transactions have been completed.
The entire process is automated, meaning companies don’t have to manually input data into multiple systems. This makes it more efficient and cost-effective compared to manual processes.
By adhering to EDI standards and protocols, companies can reduce errors and increase the accuracy of their business transactions.
Additionally, EDI compliance makes it easier for businesses to exchange documents with each other in a secure and consistent manner.
This graphic does a great job illustrating how you can easily manage order processing with EDI through integration software like Syncware:
Benefits of Target EDI Compliance
First and foremost: if you want to be an official Target vendor, it’s mandatory to exchange documents through EDI and meet Target EDI requirements.
Target has standardized its process for working with vendors through EDI.
Now, outside of the mere fact that EDI is required to sell through Target, let’s walk through a few benefits of becoming EDI capable.
First, using EDI speeds up order processing and allows you to fulfill orders automatically by eliminating manual data entry from the equation.
This means orders are completed much faster than before, allowing you to focus on growing your business instead of wasting time entering data into spreadsheets or business systems.
Additionally, it reduces order errors since all information is automatically entered into the system without any need for manual input. This results in fewer chargebacks which can kill the profitability of any retail partnership.
It also improves communication between buyers and sellers since both parties have access to real-time order status updates throughout the ordering process.
How Can I Become EDI Compliant With Target?
Target requires suppliers to use EDI to receive purchase orders.
How you get set up is sort of a choose your own adventure, though.
Some basic things you’ll need in place to work with Target EDI:
- Email address and phone number - you need a valid email address so that you can receive important notifications related to your orders (like when they’re shipped or delivered). You can also get text message notifications.
- Internet connection - you also need an internet connection so that you can access your account online.
- Permissions - you’ll need permission from either an authorized user or from someone within your company who has administrative privileges. They can then create an account on Target’s vendor portal to begin using their services.
- EDI software - you’ll need to find a EDI-compliant software provider to avoid the risk of expensive chargebacks from retailers.
Once you’ve established the basic EDI requirements (which all businesses, even small businesses, should), it’s time to get set up to handle EDI data.
One important thing to know is that Target doesn’t handle its own EDI technology. It outsources this to a company called Loren Data.
The first thing they’ll do is set up an AS2, or a direct communication between your system and the Target system. The first information they’ll seek to send is a purchase order, which is coded as an 850 EDI document. Then you’ll send back a 997, which is a functional acknowledgment (we’ll cover different EDI documents below).
This is where you’ll definitely want to find an integration partner that can help you automate the document EDI exchange.
Before we discuss the different documents and their use cases, let’s cover a few pieces of software that are used to facilitate this connection between your system and Target’s.
3 Cloud Software Integration Tools for Target EDI
In addition to an ERP, accounting, or fulfillment system, you’ll also need to invest in an EDI software solution that is EDI compliant and can meet Target’s EDI requirements.
A few popular solutions include:
- Syncware
- SPS Commerce
- TrueCommerce
1. Syncware
Syncware is how multi-channel commerce gets done for B2B businesses.
This cloud-based middleware software is the preferred solution for merchant business selling through EDI retailers like Target but also through ecommerce channels like Amazon, Faire, or sales rep software like MarketTime.
Through bi-directional data syncing, Syncware ensures that you’re not only able to manage orders and inventory, but also integrate with the rest of your ecommerce tech stack, including your ERP system, accounting software like Quickbooks, and shipping and logistics solutions.
This goes beyond what other EDI-only solutions provide, giving you a single order operations hub to manage your EDI trading partners as well as any other ecommerce sales channels you have.
The platform features a wide range of features designed to streamline the process of creating, sending, and receiving invoices, purchase orders, purchase order change request documents, advanced shipping notices (ASN), and more.
Learn more about Syncware’s Target EDI and other integrations here.
2. SPS Commerce
SPS Commerce provides retail solutions for supply chain management, trading partner management, and more.
It’s also a cloud-based EDI solution that allows businesses to exchange data with Target and other major retailers.
The platform features a dashboard for users to view, manage, and track all of their EDI documents in real time.
SPS Commerce is built for larger brands so it may be cost-prohibitive and hard to implement for ecommerce sellers with only a couple EDI trading partners. Additionally, it only enables EDI connections so you need a different solution for ecommerce sales channels like Faire, Amazon, and Shopify.
3. TrueCommerce
TrueCommerce is an all-in-one EDI solution that makes it easy to comply with Target's EDI requirements.
The platform provides features such as automated document processing and mapping capabilities.
It also allows businesses to connect directly with their Target customers through its cloud based platform. Like SPS, TrueCommerce is built for larger sellers. You might find the price is too high for your growing ecommerce brand, and that’s just to establish a connection with a single offline retailer. It can also only automate data transfers for EDI, not any API connections to digital sales channels.
Types of Documents and Their Use Cases
Target supports several types of EDI transactions for different document types. The most common are:
- 810 Invoices
- 812 Credit/Debit Adjustments
- 850 Purchase Orders
- 856 Advance Shipping Notice (ASN)
- 997 Functional Acknowledgements.
Let’s break down each of the EDI documents required in more detail.
810 Invoices
This type of document is used when sending invoices to Target for payment.
An invoice contains information about the products or services purchased from a supplier. It also includes billing details such as taxes, shipping fees, and discounts applied.
810 Invoices are typically sent after goods have been delivered or services have been rendered to the buyer.
812 Credit/Debit Adjustments
This type of document is used when modifying an existing invoice.
Credit/Debit adjustments can be used to modify specific line items on an invoice or they can be sent to request a full refund or credit balance against an invoice amount due.
850 Purchase Orders
This type of document is used when placing orders with suppliers for goods or services.
A purchase order contains detailed information about the item being ordered including product IDs, descriptions, quantities, prices, delivery dates and terms & conditions for payment.
856 Advance Shipping Notice (ASN)
This type of document is used when shipping goods from a supplier to Target stores or distribution centers.
An ASN contains detailed information about the shipment such as item IDs, descriptions, quantities shipped and expected delivery dates for each item in the shipment.
997 Functional Acknowledgements
This type of document is used by Target as confirmation that it has received other EDI documents such as invoices and purchase orders from its suppliers or vendors.
The 997 Functional Acknowledgement includes transaction set identifiers that match up with those found in each original document it receives so that both parties can keep track of their correspondence over time without having to manually search through files every time something needs to be looked up or referenced later on down the road.
If you’re curious, there are dozens more types of EDI documents and you can learn about them here.
Final Thoughts on Target EDI Compliance
Becoming EDI compliant with Target requires understanding how different types of documents are integrated into your ecommerce business operations—from processing orders, to invoicing customers, all to shipping orders from your warehouse(s).
By using Electronic Data Interchange (EDI) documents such as 810 Invoices, 812 Credit/Debit Adjustments, 850 Purchase Orders, 856 Advance Shipping Notices (ASN), and 997 Functional Acknowledgements, you can start selling through Target and shift your focus to growth within the channel!
With these tips in mind, you should have no problems becoming EDI compliant at Target.
Learn more about establishing an EDI connection to Target with Syncware.
