EDI Setup for Retail: What New Vendors Need to Know

EDI is the backbone of retail fulfillment. Without it, you cannot receive purchase orders electronically, send advance shipping notices, or invoice retailers through their systems. Every major retailer—Walmart, Target, Amazon, Dick's Sporting Goods, and the rest—requires EDI capability from their suppliers. It is infrastructure, not a feature.

But EDI setup is also where many retail compliance programs fail. Incorrect configuration generates chargebacks. Slow setup timelines extend the period of compliance exposure. Poor integration between EDI and WMS creates data discrepancies that trigger ASN failures on every shipment. Getting EDI right during initial setup is the single most impactful thing you can do to prevent retail chargebacks.

We maintain EDI connections through SPS Commerce for 60+ major retailers. This guide covers what we have learned about setting up EDI for retail fulfillment—the transaction sets, the integration points, the testing procedures, and the setup decisions that determine whether your EDI infrastructure prevents chargebacks or creates them.

The Core EDI Transaction Sets for Retail

Retail EDI revolves around five core transaction sets. Each serves a specific purpose in the order-to-cash cycle, and each must be configured to the specific retailer's formatting requirements.

EDI 850: Purchase Order

The PO is where the cycle starts. The retailer sends an electronic purchase order specifying what they want, in what quantities, delivered by when, and to which distribution center. The 850 triggers the fulfillment process—it must be received, parsed correctly, and translated into a warehouse work order without manual intervention.

EDI 855: Purchase Order Acknowledgment

The POA confirms receipt of the PO and indicates whether you can fulfill it as requested. Some retailers require the 855 within a specific timeframe after PO receipt. Failure to acknowledge can result in order cancellation or compliance penalties. The 855 also allows you to flag potential issues—backorders, quantity adjustments, or timeline changes—before they become compliance failures.

EDI 856: Advance Shipping Notice

The ASN is the most compliance-critical EDI transaction. It tells the retailer what is on its way—items, quantities, container identifiers (SSCC-18), carrier information, and expected delivery date. ASN accuracy is tracked and penalized independently at most retailers. See our ASN best practices guide for the detailed operational approach to preventing ASN failures.

EDI 810: Invoice

The electronic invoice must match the shipment and the PO. Discrepancies between the invoice and the ASN or PO can delay payment processing or trigger deductions. The 810 must reference the correct PO number, reflect the actual shipped quantities, and use the retailer's specified pricing and terms.

EDI 997: Functional Acknowledgment

The 997 confirms receipt of any EDI transaction. It does not confirm that the transaction was correct—only that it was received. Monitoring 997 responses is important because a missing 997 indicates that the transaction was not received by the trading partner, which requires investigation and retransmission.

EDI Infrastructure: Build vs. Activate

The fundamental setup decision for EDI is whether your provider is building connections from scratch or activating existing infrastructure. The difference is measured in months and chargebacks.

Building from Scratch

A 3PL building EDI connections from scratch must establish VAN connectivity, obtain trading partner qualifications from each retailer, build EDI maps for each transaction set to each retailer's specifications, integrate the EDI system with their WMS, and complete testing and certification with each retailer. This process typically takes 2 to 4 months per retailer.

Activating Existing Infrastructure

A 3PL with pre-established connections through a platform like SPS Commerce already has VAN connectivity, retailer trading partner qualifications, pre-built EDI maps for standard transactions, and WMS integration in place. Setup for a new client involves configuring the existing infrastructure for the client's specific account details, testing, and validation. This typically takes 2 to 4 weeks.

WMS-to-EDI Integration

The integration between your WMS and EDI system is where data accuracy is made or broken. This integration handles two critical data flows: inbound (POs from EDI to WMS work orders) and outbound (WMS shipment confirmations to EDI ASNs and invoices).

Inbound: PO to Work Order

When an EDI 850 arrives, the integration must parse the PO data, create a corresponding work order in the WMS, and map the retailer's item identifiers to the WMS SKU structure. Errors in this mapping—wrong SKU, wrong quantity, wrong ship-to DC—cascade through the entire fulfillment process and ultimately appear as compliance failures at the retailer's end.

Outbound: Shipment to ASN

When the WMS confirms a shipment is complete and picked up, the integration must generate an ASN from the actual shipment data—not the original PO data. This means pulling the actual quantities picked, the SSCC-18 identifiers generated during labeling, the carrier and tracking information from the shipment record, and the correct PO reference from the originating order. The ASN must be generated and transmitted within the retailer's timing window.

We integrate through Extensiv (WMS) connected to SPS Commerce (EDI), with API connections to client ERP systems —NetSuite, SAP, Oracle, Microsoft Dynamics, and others. This architecture ensures a clean data flow from PO receipt through shipment confirmation to ASN transmission.

Testing and Validation

EDI testing is not optional and should not be rushed. Every configuration error that slips through testing becomes a chargeback on the first live shipment.

• Transaction testing: Send test transactions for every EDI document type and verify they are received and processed correctly by both the retailer's system and your WMS.
• PO format testing: Test against every PO format the retailer may issue—replenishment, promotional, seasonal, drop-ship. Each format must generate correct downstream documents.
• ASN validation: Generate test ASNs from sample shipment data and verify they conform to the retailer's specifications. Check quantities, SSCC correlation, timing, and formatting.
• End-to-end testing: Run a complete cycle from PO receipt through pick-pack-ship to ASN transmission and invoice generation. Verify that data flows correctly through every integration point.

Common EDI Setup Mistakes

• Testing against only one PO type. If you test against replenishment POs but the retailer also issues promotional POs with a different structure, the first promotional PO will generate errors.
• Generating ASNs from PO data. ASNs must reflect actual shipment data. The PO says what was ordered; the ASN must say what was shipped.
• Skipping the 855. Some suppliers treat the PO acknowledgment as optional. Retailers that require it will flag non-acknowledgment as a compliance failure.
• Using generic EDI maps. Each retailer has specific formatting requirements. A generic map that “mostly works” will generate intermittent errors that are difficult to diagnose.
• Rushing through testing. Every configuration error that passes through testing becomes a chargeback. Thorough testing before go-live prevents weeks of chargeback accumulation.

I have direct access to the key decision-makers, Paul and Doug, and they make decisions quickly. There's not a lot of hierarchy in the organization, so if we need something done, a 10-minute phone call is all it takes.

EDI issues that surface after go-live need fast resolution because every day of incorrect configuration is a day of potential chargebacks. Direct access to the people who manage EDI configuration—not a support ticket queue —is the difference between fixing a problem in hours and fixing it in weeks. If your EDI setup needs attention, start a conversation with our team.