Person setting up their EDI integrations.

As a dropshipper, you act as the middleman between suppliers and your customers. This means you don’t have to deal with the hassle of managing inventory yourself, but it does mean you need to exchange information between all of these parties — and that can get messy. 

Fortunately, there are easy ways to automate the exchange of data between yourself, your customers, and your suppliers.

Electronic data interchange (EDI) is a method that businesses use to standardize the data they exchange.

The thing is, there are multiple EDI standards, and there are many different EDI document types within each standard. 

There are a lot of EDI document types to pull from, but EDI 856 is one of the most common for dropshippers. You’ll likely encounter EDI 856 while working with your suppliers, so it’s good to understand how it works. 

Let’s look at what EDI 856 is, how dropshippers use it, and how you can simplify it with the right platform.

What is an EDI 856?

Team working on setting up EDI integrations for their eCommerce store

EDI 856 is called an Advance Shipping Notice but it’s often referred to as EDI ASN.  Its purpose is to tell the receiving party about the contents of a shipment they’re receiving from a trading partner. It’s usually sent in response to an EDI 850, EDI 830, or EDI 862.

EDI ASN establishes the contents of a shipment manifest, so a supplier would normally send this to you before a shipment goes to your customers.

As a dropshipper, you don’t need to know very much about the nature of the shipments to your customers, but other types of companies typically rely on an EDI 856 for more in-depth information.

Retailers, manufacturers, and the automotive industry rely on EDI 856 to share tracking numbers, purchase order numbers, item quantities, and more.

What Are the Components of an EDI Advance Shipping Notice?

Person working at computer, clicking mouse.

Advance shipping notices will go into different levels of detail about a shipment, offering as little as the tracking number or as much as including the barcode for each product.

Depending on the situation, EDI 856 components can include: 

  • Order information

  • Product descriptions

  • Packaging information

  • Carrier information

  • Markings

  • Physical characteristics

  • Configuration of goods

  • Shipping number

  • Estimated delivery date

  • Sender address

  • Receiver address

The Benefits of Electronic Data Interchange 856

eCommerce store owner setting up EDI

So, why do businesses bother with EDI 856? It might sound like an unnecessary complication, but EDI 856 simplifies retail communications.

Instead of sending paper forms through the mail, businesses can automatically transmit shipping information electronically — and that saves a lot of time.

EDI 856 is also helpful for these five reasons.

It Gives Buyers a Heads-up

Sellers can foster better relationships with buyers by giving them advanced notice of what products they’ll receive and when. 

Prevents Errors

EDI 856 transmits essential shipment data automatically, so you don’t have to worry about input errors. It takes human error out of the equation, which means you and the other parties using EDI can trust that the data is accurate. 

Leaves a Paper Trail

Since it’s so technology-forward, EDI 856 leaves a much-needed paper trail that gives you peace of mind — just in case you ever have a dispute with your suppliers or a customer.

Helps Retailers

Retailers use EDI 856 documents to plan their inventory and labor requirements. If they know a lot of goods are coming in on a certain day, they can make room on shelves and schedule more staff to accommodate the delivery.

Improves Customer Relationships

Dropshippers are usually responsible for sharing tracking information with their customers.

You can use EDI 856 to get delivery information from your supplier and, with the right system, automatically share that data with your shoppers. It’s a great way to give your customers better visibility into their orders, which is always appreciated.

How Does EDI 856 Work?

Three people walking through a warehouse.

Typically, a seller will receive an order from a buyer. When they prepare the order for shipment, they need to tell the buyer the details of the physical shipment they’re sending.

EDI 856 helps the buyer configure their workflow and staffing so they’re prepared to process the shipment as efficiently as possible.

For example, if the buyer needs a forklift to remove goods from the shipping container, that’s a good thing to know. 

The seller will send the buyer an Advanced Ship Notice with the shipment information via an EDI 856. The buyer will then respond with EDI 997, which is a Functional Acknowledgment. This is a digital receipt telling the seller that the buyer received the EDI 856. 

Most retailers require an EDI 856 from their suppliers because the document makes it possible to quickly send information between suppliers and retailers. That’s all well and good for retailers, but EDI is tough for suppliers to implement, especially if they work with multiple retailers.

It means they have to manage different data formats for all trading partners at a high volume. The right EDI solution simplifies this, though: advanced solutions will automatically translate and map a supplier’s internal EDI into the format the other party uses.

EDI 856 Example

EDI 856 typically follows the x12 format from the American National Standards Institute (ANSI), which is a non-profit that’s in charge of all of the EDI standards in the United States.

If you’re using EDI 856 in Europe, it’s governed by the EDIFACT Standard. 

Keep in mind that EDI 856 is a data format that’s designed for your EDI software to translate and map.

It will likely look like gibberish to the untrained human eye, so that’s why it’s important to go with quality EDI software.

EDI solutions translate and map data a little differently, though, so it isn’t unusual for EDI 856 documents to look different depending on the business sending and receiving it. 

EDI 856 is not very pretty — if anything, it reads like code that’s intended for computers to process. 

If you do want to look through EDI 856 data manually, it follows a hierarchy for shipping, order, pack, and item information:

EDI 856 Code Example

How Is EDI 856 Used for Dropshipping?

 

Person receiving a dropship order.

EDI 856 is most popular with retailers and their suppliers, but it affects dropshippers, too. As a dropshipper, you need to know where your customers’ orders are and what they contain. 

Since you don’t ship the products yourself, you rely on a supplier to do it for you. If you receive an EDI 856 from your supplier, the document will tell you where the items were shipped from, when they shipped, and the estimated delivery date.

If you use a solution like Spark Shipping, you can automatically pull fulfillment information from the Advanced Shipping Notice document and convey information to your customers — no manual effort is required.

How Spark Shipping Helps with EDI 856

EDI 856 is a must-have for retailers, but it’s also something you might encounter as a dropshipper. If your suppliers work with EDI, get a smart platform that syncs your internal data to the formats your suppliers send them in. 

You don’t have to handle EDI 856 on your own, either. Spark Shipping helps dropshippers implement and automate EDI for their eCommerce stores. See how we can automate your order fulfillment automatically.