Whether you’re a retailer or a supplier, maintaining good relationships with your business partners is a crucial element in running a successful organization. Good B2B relationships foster more sales and continued partnerships. One way to ensure a healthy relationship is to foster a sense of trust with your trading partner. You need to convey a trustworthy image that reassures you partner they are making the right choice in working with you, and that you can deliver and get the job done. Utilizing EDI (electronic data interchange) is a great way to build better relationships with your business partners and convey a trustworthy image.
B2B transactions are typically much more costly than B2C (business to consumer) ones. In fact, it is estimated that error costs can be as much as five times the cost of processing the document correctly to begin with. If a company is going to invest a significant amount of money with you, they need to feel assured that there is little risk associated with both you and your product. EDI boosts that sense of security, as documents are sent and translated electronically, which ensures all information is accurate. Manual touches are removed from the order equation, so all billing, shipping, and item information is correct. Shipping errors, especially for large items or pallets can be very costly. By removing the chance of a costly error, you are an attractive company to do business with.
EDI enables companies to work in real-time, allowing inventory quantities to be up to date. For suppliers and retailers that are drop ship partners, working in real-time is crucial. If the supplier does not update the retailer on their inventory levels, and an order is placed for an item that is out of stock, a strain is put on their relationship. The customer is upset with the retailer for the misleading item information. In turn, the retailer is upset with the supplier because a sale was lost due to inaccurate inventory levels. This jeopardizes the duration of trading partner relationships as well, as no one wants to do business with someone that could lead to lost sales. EDI can send inventory updates quickly and seamlessly, which eliminates out-of-stock orders and backordering. With these risks eliminated, customers will be satisfied with their retailer and in turn, the retailer will be satisfied with their supplier.
For many big box retailers, EDI has become a mandate. In order to do business with companies such as Macy’s, Sears, and Best Buy, you must be EDI capable. Implementing an EDI strategy to do business with large stores boosts your trading partner portfolio, and will make you more attractive to other potential partners. By adding more trading partners, you are adding more sales, and therefore, more revenue.
Since EDI documents are sent and received at a much quicker rate than paper documents, and flow seamlessly, unlike emails and faxes, you will be able to process more orders in less time. With a faster order cycle, both businesses will fulfill orders at a much quicker rate, allowing them to grow together. This further fosters a sense of trust, because your success is linked to the success of your trading partner. Since both parties wish to be prosperous, each side will work their hardest to ensure and fulfill their end of the transaction.
Fostering a good relationship with your trading partners is an important component to running a successful business. A good relationship with your trading partner not only leads to a continued partnership, it can also bring in new partners through references and a good rating on your vendor scorecard. Implementing an EDI solution not only enables you to work with large companies who have mandated it, it also makes you attractive to SMBs and partners looking for an automated drop ship process. With EDI, companies will perceive you to be less expensive to do business with and more efficient because fewer resources are needed to process orders, deliveries, and payments.