What EDI Actually Is (And Why You Shouldn't Have to Think About It)

There's a moment nearly every CPG founder remembers. You land your first purchase order from a major retailer — Whole Foods, Target, Walmart, Sprouts — and the excitement is real. This is the milestone you've been working toward. National distribution. Real shelf space. The dream.

And then the retailer sends you a 50-page vendor compliance guide and tells you to set up EDI.

Suddenly you're Googling acronyms you've never seen before, trying to figure out what an 850 is, why your ASN was rejected, and whether the $15,000 chargeback you just received is a mistake or a feature of the system. Welcome to wholesale.

EDI, Explained Simply

EDI stands for Electronic Data Interchange. At its core, it's a standardized way for businesses to exchange documents electronically — purchase orders, invoices, advance ship notices, and dozens of other transaction types — without relying on paper, email, or phone calls.

The concept dates back to the 1960s and 1970s, when large retailers and their suppliers needed a way to transmit order data between their computer systems. The standards were formalized in the 1980s (the most common in the U.S. is ANSI X12), and by the 1990s, EDI had become the de facto language of retail supply chains.

Here's the important part: EDI isn't a single piece of software. It's a communication protocol — a shared format that lets different companies' systems understand each other. Think of it less like an app and more like a language that your systems need to speak fluently in order to trade with major retailers.

The Document Types That Matter

If you're a CPG brand selling into retail, there are a handful of EDI document types you'll encounter almost immediately.

The 850 is the purchase order. This is how a retailer tells you what they want, how much, and when. The 855 is the purchase order acknowledgment — your confirmation that you received the order and can fulfill it. The 856 is the advance ship notice, or ASN, which tells the retailer exactly what's on the truck, how it's packed, and when it will arrive. The 810 is the invoice. And the 820 is the payment remittance advice.

There are many more document types, but these five form the core loop of wholesale commerce: order, acknowledge, ship, invoice, pay.

Each retailer may have slightly different requirements for how these documents are formatted, what fields are mandatory, and what triggers a compliance violation. This is where the vendor compliance guide comes in — and why it's rarely light reading.

Why EDI Feels So Painful

For brands that grew up in the DTC world, EDI can feel like stepping back in time. And in many ways, it is. The underlying architecture was designed for an era of mainframe computers and batch processing, not cloud-native applications and real-time APIs.

Several things make it particularly painful for growing brands.

First, there's the setup complexity. Getting EDI running typically means working with a VAN (Value Added Network) or an EDI provider, mapping your internal data to the retailer's required format, and testing the connection. This process can take weeks and often requires technical expertise that early-stage brands don't have in-house.

Second, every retailer is slightly different. Walmart's EDI requirements are not the same as Target's, which are not the same as Kroger's. Each new retail relationship can mean a new mapping exercise, new compliance rules, and new potential failure points.

Third, the consequences of getting it wrong are real and immediate. A malformed ASN or a late shipment notification can trigger chargebacks — financial penalties that retailers deduct directly from your payments. For a brand operating on thin margins, chargebacks can quietly erode profitability.

Finally, EDI is often managed manually by operations teams who are already stretched thin. Keying in ASNs by hand, cross-referencing purchase orders against inventory, and chasing down discrepancies between what was ordered and what was shipped — these tasks consume hours that compound with every new retail partner.

The Best EDI Strategy Is Invisible EDI

Here's the thing about EDI: it's essential infrastructure, but it shouldn't be a full-time job. The brands that handle EDI most effectively are the ones that have automated it to the point where it runs in the background, like electricity or internet service. You know it's there. You rely on it. But you don't think about it day-to-day.

This means automating the full document lifecycle — from receiving an 850, generating an 855 acknowledgment, creating the 856 ASN when the shipment is ready, and issuing the 810 invoice — without requiring someone on your team to manually touch each step.

It also means building compliance into the automation itself, so that the system knows Walmart needs a specific GS1 label format while Target requires a different carton breakdown, and handles those nuances automatically.

When EDI becomes a background utility rather than a manual process, brands gain two things: they stop losing money to avoidable chargebacks, and they free up their operations team to focus on work that actually moves the business forward.

What to Look for in an EDI Solution

If you're a CPG brand approaching your first major retail partnership — or your fifteenth — here are the things that matter most in how you handle EDI.

Look for automation that covers the full document cycle, not just one or two transaction types. A tool that automates your 856 but leaves your 810 manual just moves the bottleneck.

Make sure the solution can handle multi-retailer complexity without requiring a separate setup for each partner. Your EDI infrastructure should scale with your distribution, not create more work every time you add a retail door.

Prioritize speed to go-live. If it takes three months to get EDI running with a new retailer, you're losing time and revenue. The best solutions can have you transacting in days.

And above all, look for a system where EDI is part of a larger operational workflow — not an isolated silo. EDI data should flow directly into your logistics coordination, invoicing, and payment reconciliation without requiring manual handoffs between disconnected systems.

The goal isn't to become an EDI expert. The goal is to never have to become one.

How Jampack Makes EDI Invisible

This is exactly the philosophy behind Jampack AI. Our agentic platform automates the full EDI document lifecycle — 850s, 855s, 856s, 810s, and beyond — as part of an end-to-end wholesale operations workflow. Retailer-specific compliance rules are built into the automation, so your ASNs, labels, and invoices are generated correctly the first time, for every trading partner. No manual keying. No chargeback surprises. No three-month onboarding process every time you land a new retail account. Jampack turns EDI into what it should have been all along: invisible infrastructure that just works. Learn more at jampack.ai.