Vendor relationships are everything when you run an online store.
As an eCommerce pro, you’re all too familiar with the vendor onboarding process.
It’s hard enough to find a trustworthy supplier, but you also need to iron out the logistics of working with this new vendor.
Most vendors use some kind of digital solution to transmit data and process orders for their customers. EDI and API are two of the most common ways to do this.
But if your vendor says, “We use EDI” or “We use API,” and those words sound like gibberish, don’t sweat it!
This guide will explain what EDI and API mean, as well as their pros and cons.
We’ll also detail the differences between the EDI and API technologies and share a huge time-saving hack to help you avoid the hassles of choosing between EDI and API.
EDI stands for Electronic Data Interchange and is a standardized method for exchanging data electronically between business partners.
Electronic data interchange facilitates the transfer of business documents and data from one computer system to another—all without manual intervention.
For example, if you want to place an order with an external trading partner, there’s no need to make a phone call or send an email.
All you need to do is submit an order online, and the vendor’s EDI system will translate it into a standardized format that they use to fulfill the order.
It might sound high-tech, but electronic data interchange has actually been around for decades.
It has a long history in the logistics industry for supply chain processes, but your eCommerce suppliers might use it, too, especially for retail.
You can get around this by following your supplier’s setup to a tee, but this workaround falls apart if you buy from multiple trading partners with different standards.
API stands for application programming interface. This is a newer and more modern way to do data transmission. APIs are gaining popularity because they allow real-time data exchange between multiple systems.
For eCommerce, your trading partners will give you an API. When a shopper places an order in your store, the API automatically sends the request to the supplier’s system in real-time.
This API call includes all details about the order, which the supplier’s system uses to confirm product availability. If everything looks good, your supplier starts the fulfillment and shipping process.
EDI and API each have their pros and cons—there’s no clear winner.
If you’re trying to choose between different suppliers who use either EDI or API, it’s important to understand the differences between EDI and API.
History: EDI originated as far back as the 1960s for retail businesses. APIs are a more modern approach that multiple industries rely on to exchange data.
Communication methods: EDI is primarily asynchronous, so it doesn’t happen in real time. Instead, it batch processes large datasets at scheduled intervals.
APIs, on the other hand, are usually synchronous, and updates happen in real-time.
Flexibility: EDI is robust, but it isn’t as flexible because it relies on rigid standards like EDI 846 and EDI 856. This is why it doesn’t play nicely with new technologies. APIs are highly flexible and integrate with a multitude of platforms and systems.
Data format: EDI uses a structured, standardized data format, but some industries have EDI standards for uniformity. APIs are more versatile; they can handle XML, JSON, and other formats and automatically adjust depending on the systems they connect with.
Setup: Both options can have pretty complex setup processes, but this depends on your current setup and what your business partners need. EDI usually requires specialized software to translate data between two EDI systems. APIs don’t need this and usually come with tools that simplify implementation.
Security: EDI might be an older technology, but it’s definitely more secure. It allows you to use value-added networks (VANs) for extra security, which makes it ideal for large stores that want to lock down their data. APIs, on the other hand, don’t have such robust security. You’ll need to monitor them often and stay on top of security updates.
For business executives responsible for making decisions, it might feel like a big task to choose between EDI and API technologies. The good news is that you don’t have to limit yourself to one technology or one type of vendor.
Platforms like Spark Shipping offer seamless EDI and API integration, so there’s no need to worry about file compatibility or integration—just connect your account to your vendor’s system and you’re ready to start selling.
Check out our vendor integrations to skip the EDI vs API debate and streamline your eCommerce business.