The Startup CPG Podcast

In this episode of Startup CPG Podcast, Daniel Scharff sits down with Emily Curran, Senior Manager of Product at SPS Commerce, to talk about the role of Electronic Data Interchange (EDI) in optimizing supply chain processes. Emily breaks down how EDI automates the exchange of business documents between retailers, distributors, and brands, offering listeners an introductory understanding of its basic concepts and benefits for efficiency and accuracy.

They also cover the necessity of EDI for brands aiming to partner with large retailers, including the costs involved, the setup process, and the numerous advantages it offers. Emily highlights how EDI can save time, reduce manual data entry, and enhance order management, making it a valuable tool for growing brands. This episode is a must-listen for small businesses looking to streamline their operations and strengthen their trading partnerships through the adoption of EDI.

Tune in now !

Listen in as they share about:
  • What is EDI
  • Importance of EDI for Growth
  • EDI Process Overview
  • Challenges and Benefits + Cost of EDI
  • When to Adopt EDI
  • SPS Commerce
  • Choosing an EDI Provider
  • Tips for Brands
About SPS Commerce
SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service and accessible experts so our customers can focus on what they do best. To date, more than 120,000 companies in retail, grocery, distribution, supply, and logistics have chosen SPS as their retail network. SPS has achieved 92 consecutive quarters of revenue growth and is headquartered in Minneapolis.


Episode Links:
SPS Commerce Website
Emily Curran LinkedIn

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Show Links:

Transcripts of each episode are available on the Transistor platform that hosts our podcast here (click on the episode and toggle to “Transcript” at the top)

Creators & Guests

Host
Daniel Scharff
Founder/CEO, Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Emily Curran
It's okay to take that crawl, walk, run approach, get set up with EDi, be able to say yes to those partnerships that are requesting it, get your feet wet, learn how to use it, go grow that business. And then when you're at a point where your business is ready, just look at how you can continue to automate.

00:28
Daniel Scharff
And scale you down with EDi? Yeah, you know me, who's down with EDi? The CPG. Hello everybody. A lot of us first hear about EDI when a distributor or retailer asks, are you EDI compliant? And when that happens, instead of being confused and Googling, after this episode, you will be a pro. EDI, or electronic data exchange for you brands is all about automating the process. From when you get a purchase order to delivering and invoicing. Rather than doing all of that manually, we cover when you might need to get set up with EDI, how to evaluate the costs and all the benefits, and even some insider tips on how to make the most of it. Thanks a lot to our sponsor SP's commerce for this great episode and helping educate me and our whole community. Enjoy. Hello everybody. Welcome to the podcast.

01:19
Daniel Scharff
Today we've got Emily Curran, who is the senior manager of product at SP's commerce. They are well recognized as the leading company in EDi. They connect partners all across the supply chain like grocers, your distributors, warehouses and brands. Of course, they help optimize and automate the supply chain through data exchange so that you can spend less time manually tracking orders and flow of goods and more time trying to grow your business. I'm really excited to get into this topic of EDi today. We're going to treat it like a 101 for the many of us who haven't personally used it or use it, but can't remember exactly why we have to use it and learn about all the good stuff that it can do for you. So Emily, welcome to the podcast. Real quick, can you just do an intro for us? Who is Emily?

02:05
Daniel Scharff
How did she end up at SP's?

02:07
Emily Curran
Yeah, absolutely. So hi everyone. Thanks for joining us today. Yes, my name is Emily Curran, current product manager at SP's commerce, and my story to Sp's is maybe an uneventful one. I mean, I definitely did not go to school or grow up dreaming to be involved in EDI whatsoever. But now that I'm here, I'm glad I found it. So, long story short, I graduated in 2008 and for anyone listening, that was around back then. I mean, the economy, the job market was just non existent. So I kind of took the first job I could get, which happened to be as a sports information director in a super small town in Wisconsin. And that was actually up my alley because I interned in our sports information department when I was at school, college. But it wasn't what I wanted to do long term.

02:56
Emily Curran
And thankfully, one of the friends that I met at school had a job in at SP's. So I was really looking to get back to Minneapolis, to the Twin Cities. He was able to get me a referral at SP's, where I was able to get a job in our customer service department. And I've spent the last 15 years working directly with our brands, with our customers in various roles like sales, engineering, and now product management. And funny story, that friend that referred me to SP's is now my manager in product as well. So it's Hamlin Piper is just, you know, crushing it over here at SP's.

03:32
Daniel Scharff
All right, so if you've been in customer service there, some of my favorite people to talk to. I know that every question I'm about to ask you have answered literally 1 million times. So prepare to do it. Here we go. And just before we jump in, I'm actually curious. I haven't spent enough time in Minneapolis. I've gone for a couple meetings, you know, for target and my consulting days and kind of bigger CPG days. But I know there are a lot of people, there are a lot of legacy CPG companies there, a couple startups. What's the scene like? Are there any events? Do you meet some local CPG entrepreneurs?

04:05
Emily Curran
Yeah, absolutely. So, to be honest, I actually heard about startup CPG through one of the local brands in Minneapolis. So I would say our emerging brands seeing here is really thriving, especially in food and beverage. I mean, I am a foodie at heart. So a lot of the brands that I like to follow are in that space. They're doing some really cool things here. They're focusing on unique and fun product offerings. They're focusing on health products. So, for example, illicit elixirs. They're a fun, cheeky brand for dopamine beverages. Who doesn't want to be happy if Dopamine doesn't give you that happy kick? We've got t rex cookies. Their slogans, no dainty bite. They've got a five pound cookie. So I'd say these brands, they're out at farmers markets. They're beating the streets. They're at art fairs, pop ups, breweries, you name it.

04:56
Emily Curran
But it's really cool to see just all of the talent and the unique products that are out there and starting up here in Minneapolis.

05:04
Daniel Scharff
And also, one of the positive stereotypes I have about Minneapolis is that it's a bangin food truck scene. So definitely a foodie town. Isn't that right? When I was there, it was just. They were all over.

05:15
Emily Curran
Yeah, they still are. We have a food truck pop up events. I mean, you can't go to, like, a town fair or event without pop up truck. Food trucks everywhere. And we even have one parked outside of our building throughout the week, too, which is fun.

05:27
Daniel Scharff
All right, we might have to add that as a new possible channel for all the CPG companies to think about. Definitely. At least in Minneapolis, your food truck strategy. Okay, so I'm very eager to get into today's topic because honestly, of all the things we've discussed on the podcast, I think it's one that's probably the lowest understood by the community, but one that they should, especially as they start to grow. EdI, if you're just starting out or preparing to launch, no one's talking to you about it yet, but at some point, you're going to be getting set up with a distributor. Hopefully, if they're a serious one, they might ask you in the onboarding forms, are you EDI compliant or set up?

06:08
Daniel Scharff
Or if you're applying to target or Walmart or a lot of big regional or national retailers, they'll ask you that as well. And you don't want to wait for that when you have a deadline to know whether or not you can check that box. So just to start out, my understanding of EDI always starting out was like, oh, okay. It's basically like, instead of getting the orders emailed to us, and then we'll email them to someone else, and then we'll write down what happened to basically, it can kind of automate all of that and things flow more electronically. And then I also understood, like, okay, you do have to get set up to do that. There's a process for it. So give me the EDI 101. What about that is true? What do I not know about it?

06:48
Emily Curran
Yeah, absolutely. So, I mean, I think you're spot on in terms of EDI typically is going to be required for brands to do business with these larger retailers, with these larger distributors. And it is you're automating supply chain documents. So kind of like you said, what listeners are going to be familiar with is you're getting an order via email today or someone still calling and phoning in an order. So as you start to break into these larger retailers. If you think about it from a retailer's perspective, they have thousands of other brands or suppliers that they're working with. So this manual process is just not going to be optimized for them or even applicable to them. They're not going to be able to operate their businesses with it. So that's where they'll lean on EDI.

07:32
Emily Curran
And I think that is true that EDI, again, electronic data interchange, you're exchanging electronic documents, but it's really more than just that technology aspect. It's also how these companies are running their business and how you operate within supply chain. So for example, if you think about that order that you're getting manually today, when you start to do EDI with a retailer or distributor, you're probably going to hear them refer to something like an 850 purchase order. So again, they're going to send you that order electronically in this coded language that you have to be able to receive. And then in addition to receiving that order, it's also going to include the business processes or the rules for how they want you to confirm that order when they want you to confirm it, so that they can make the appropriate decisions on their end.

08:25
Emily Curran
So thats where I think it is, part of just automating the supply chain. But its more than just that technology aspect that I think sometimes people get a little bit scared of with EDI.

08:35
Daniel Scharff
Okay, so that makes sense. And then it sounds like if youre like an early brand and youre just selling to a couple local chains or maybe with a smaller distributor, they may not require you to do it at that point. And I dont know. I mean, you might even say its good to of get some practice in with the POS and probably in the early days maybe good to be very hands on with it and you get it. And if you have a warehouse, youll have to send an order to them so they know to release it and all that stuff that later you could automate with an EDI.

09:09
Daniel Scharff
But yeah, at some point I guess part of theory is with these bigger retailers, it is not worth their time to have a bunch of little pos with small brands and have to remember to send them and have their time spent doing that and wondering if they were received and all of that. So for them, at the speed that they operate, they are I guess, probably just going to prioritize brands that are Edi compliant. And I know in some instances, let's say probably target if they do something with a company locally I've heard of even brands that they let just deliver themselves personally to some stores, especially during the pandemic and stuff. Maybe there's some ways around it. But for sure, if you're getting a ton of those stores or your dream is to go national with them.

09:56
Daniel Scharff
And I know with some regional retailers also, they just straight require it and they're not going to look at you if you don't have it. So I guess at some point, you know, when it becomes obligatory for you versus something you could put off if you wanted to. If you wanted to, you know, be scrappy or just, you know, drag your feet a little bit.

10:15
Emily Curran
Absolutely. I mean, they might give you a little bit of a grace period, like you said, if you're just in a few regional stores. So they just want to test the waters with the business. But I think what we are more commonly seeing is that these retailers and distributors want their vendors to be EDI compliant earlier in that relationship. So I know in like the slack group, we've seen a lot of questions around. I just started this relationship. I have no idea how successful it might be. Why on earth do they want me to do EdI and do I have to do it? And that's where I think, again, it goes back to the business process and the operations.

10:51
Emily Curran
If I can give a nerdy EDI example, like what you're probably going to hear some of these distributors or retailers asking for is an advance ship notice. So think of that as just that document that's communicating the shipping information. Well, they want that document because when your truck of products arrives at their store or at their DC, they know when it's coming. They can quickly unload the product and get it on the sales floor faster. Whereas for example, without that advanced ship notice, without that EDI document, that retailer distributor is essentially blind. And we've had retailers tell us that without an ASN, that product can sit in the back room for up to six days, whereas with the ASN, they can actually process it and receive it that same day. So you're avoiding out on those missed sales.

11:43
Emily Curran
So that's where it's like even with a few EDI orders, even for some of these smaller emerging brands, if you're trying to break into retail, EDI is really going to be a benefit for both parties.

11:54
Daniel Scharff
Okay, so the ASN advance shipment notice, that's something that's going to with you guys. It'll get generated automatically otherwise, like, I mean, probably hard for you to put that together just given how long it can take to get updated by your warehouse based on a pickup or something like that. So it hits the retailer and lets them know that the product is on the way and then maybe they can process it faster, get it from the back of the warehouse that they're receiving in up to the front of the store or whatever faster. So I want to try to do something and let's see if I get it right. If I can kind of map out the order process in my head that generally you guys are updating.

12:33
Daniel Scharff
I haven't really practiced this or even thought about it, so let's see if I get it. But typically, you know, I guess what you would call, I don't know if it's order to cash or like, yeah, it would be okay. So probably the first thing that happens, you as a brand are going to receive a purchase order. Often that would come from the distributor. You know, at least as an emerging brand, most of your stuff is going to go through a distributor, but if you're going direct, it could come from the retailer and that's going to come to you. And it's going to have information about what they're ordering, the quantities, the price. It's going to have the address that you need to deliver it to and payment terms and all of that good stuff. You then receive that purchase order, maybe over email.

13:14
Daniel Scharff
Ideally you're already set up with EDI and you don't have touch it, but probably in the early days, it's like an email or, I mean, it could be like a phone call or a text that you get, and then you have to enter it into your system. And then you have that order. Right. And then you're going to have a whole process that makes sure you actually have the inventory for it and are making it. But then probably you want to confirm that order back to them. Like, yes, I got it. We're going to deliver it and there's an approximate date that you asked for and we're going to try to hit that also. And then you're going to take that order and then transmit it to wherever your product is sitting.

13:48
Daniel Scharff
So you want to let your, let's say warehouse know, and maybe you have a couple warehouses or maybe just one, or maybe you are the warehouse. I don't know. But okay, we have this order. Here's the quantity we need to deliver, and here's where it needs to go to. Okay, great. And then they're probably going to confirm that back to you. And then they're going to check it with their inventory that they're sitting on, make sure that they have the inventory probably tell you that they can fulfill it, and then at some point someone's going to coordinate the delivery of that. And maybe it is you, maybe it's your warehouse or a three pl or maybe it's the retailer because they're going to come and pick it up. But someone's going to schedule a truck company, logistics, whatever.

14:25
Daniel Scharff
They're going to call and make an appointment probably, and then that's going to get confirmed and they're going to say, exactly, yes, and we're picking up this amount and the warehouse going to confirm, yes, you're going to pick up this amount. And then the magic day comes when the truck comes and picks it up. And then they are also going to have some kind of a document like, yes, this is how much we picked up, which could be the same amount or it could be different. There are always like a couple cases that can be off or they ran out and stacked the pallet incorrectly, and then those things have to synchronize and then they have to communicate that back to you. And then you can know what happened versus the order that you received.

14:56
Daniel Scharff
And also then the retailer that receives it, once it actually gets there, they're going to do that whole process again, check how much stuff was there. And then at the end of all of that, everything kind of gets reconciled. And then eventually you're going to confirm that everything was fulfilled and then you are going to issue an invoice against, I mean, either the purchase order or what you actually delivered. If you had to adjust the purchase order, if there was a difference there. And then you hope that you get paid quickly and not, you know, 90 or 120 days or whatever later. Did I get that right for the very manual way to do all of that stuff and all the places think things can go wrong and thus maybe all the stuff that EDI can help you with.

15:36
Emily Curran
You got it. So, I mean, I think you just nailed what is involved in supply chain and specifically that order to cash process. So if we just kind of talk about how you can insert EDI, then to help automate with that. So first of all, let's start by just eliminating the need for that distributor, that retailer to even communicate that order to you manually. So what they'll do is they'll send it via EDI. And if you're using a provider like SP's, you're still going to receive that order very similar to like you do email. Today we're going to take care of translating, getting rid of any of the EDI code segments, you need to know nothing about that. And you're going to get a human readable order just like you would an email, and that's going to show up in our fulfillment solution.

16:20
Emily Curran
And then the running joke with EDI is that it was meant to be a standard, but no two retailers, no two distributors do it the same. So that's where everyone has their own nuances there. So sometimes they will want you to confirm or acknowledge that order because again, if it's your buyer, they want to know that, hey, I placed this order with you. Can you actually fulfill it or do I need to make alternative decisions to make sure I can get product to the right place? So typically there is a confirmation that's involved. And again with SP's, we can help automate that depending on your business process. So typically, if you're always accepting your orders, you're good on your inventory. That can just be something that we automatically send out on your behalf. You don't have to think about it.

17:02
Emily Curran
But if you know there are situations where maybe you might not have the inventory to fulfill and you just want to communicate some adjustments to the quantity. Again, our solution makes it super simple for you to be able to communicate that back and do all the heavy lifting of getting it back into the distributor or the retailer's EDI format. So now you've confirmed the order. So you would go through your normal pick pack and chip process. So I have a feeling for many of our listeners, you've actually chosen to outsource that to a third party logistics company or a three PL that we call them in the industry where they're warehousing the product for you. So they're actually going to take care of that. If they have their own EDI capabilities, we can automate those documents back and forth.

17:45
Emily Curran
So they'll get the order to know exactly what to pick, where it needs to ship, when it needs to be shipped by. If they don't have EDI capabilities, you could give them access to your account or assign them a user seat to be able to use that and meet that EDI requirement on your behalf. But then typically as part of that process, you're booking your carrier, you're figuring out how to get the truck, loading it onto the truck, that shipments going off, and then you want to get paid. So you're going to send that invoice and typically again, when invoices are sent electronically, you're going to get paid faster.

18:17
Daniel Scharff
Okay. So that makes a lot of sense. Also, you mentioned something important, I think for people which is maybe when you're choosing a warehouse, find out if they are EDI compliant. If you expect to grow into some of these great retailers that I hope a lot of us will all get at some point, because you don't want to be in a situation where you then need to do that and all of a sudden you're in ancient warehouse that is still handwriting everything, which probably a lot of them still are. But in your experience, how many warehouses are EDI compliant? Is it like pretty much all? Is it some, most?

18:46
Emily Curran
Yeah, I think that's definitely a fair question you want to be able to ask as you're looking for providers. I would say again, in this day and age, most three pls have EDI capabilities. Again, they're servicing you as the brand their customer, and they need to help you adhere to your customers requirements and they know that very much in that retail distribution space, EDI is required. So I would say most three pls are EDI capable or if that's a requirement of you to do business with them. If they aren't, they can go out and find solutions as well to meet that need for you. But I think that is a very important question to ask because again, it's more than just the data exchange. Right. It's also how does that shipment need to be packed? How many each's go in a carton?

19:32
Emily Curran
Do they allow pallet and carton labels and all those rules that go into the different fulfillment models or the way that something can be shipped is also very much part of EDI.

19:42
Daniel Scharff
Okay, great. So that gives me a pretty good understanding of it. And I think if you go back to that very long step process that I went through, it sounds like with EDI, it automates the stuff. Instead of you might get a PDF from one person and a text from someone else, you have to enter that all into your system. It does automate and systematize or all of that stuff, but it's not like a hands off process at this point when you have the EDI.

20:08
Daniel Scharff
Yeah, it's going to make all of that already there in the system, but then you can probably spend more of your time just checking things are right and making adjustments if you have to things rather than be responsible for creating all of these different manual inputs and sending the emails and checking they got the emails and all this stuff because it's all just streamlined.

20:27
Emily Curran
Yeah, exactly. I mean, the way I would explain it is as a startup or as a small business, again, think about what your core competencies are and do you want to spend your time manually entering data or translating data, building out EDI maps, maintaining those connections? I'm going to assume no. So how do you just look at improving those processes, like establishing EDI to automate? You know, one thing I didn't hit on in the overview, but again, if you've got systems like QuickBooks or NetSuite, we can automate into those systems as well. So we have many customers that really, for them, EDI just happens automatically. They don't have to think about it. I mean, those orders are coming into their system. They're running through their own workflows or business processes to validate the inventories, they're kicking out the appropriate return documents.

21:18
Emily Curran
So literally, all they have to do is physically pick and pack and ship the product or just validate that their three Pl has done that and check to make sure they get paid.

21:29
Daniel Scharff
Yeah, the integrations is a good point because, you know, also, like, when you're really just starting, you might not have anything going. And then, like, I think all of the software tools are like, yes, and I want that one. And, oh, my God, if I could integrate it with that, like, yeah, get the quickbooks. Get, like, you know, a nice little inventory management, like sin seven, one of our partners, a lot of people use. It integrates with all that stuff. And then you get the EDI, and then everything just syncs. And I know where my inventory is and how much I have, and I can quickly tell you stuff rather than, like, the old world of, let me just ask the Ops manager every time and then ask him ten minutes again later after something changes, to run the whole analysis again.

22:05
Daniel Scharff
And so I know Ops managers probably are big fans of this, but, Emily, it sounds too good to be true. What's the cost? How much does it cost to get set up the first time? Is it just a setup fee or a subscription fee or a per order fee? How do we end up paying for the loveliness of this convenience and accuracy?

22:26
Emily Curran
Yeah. Can I tell you my favorite answer? It depends. So this is where you know, again, I think it depends. As a listener, you know, what do you want to do for your EDI solution? Because you have options, right? So it is important to understand what your options are, what a provider is going to do for you, versus what you might have to do yourselves when it comes to Edi. But across the board, typically, I would say what we see is there's going to be some type of one time setup fee. So think of that as standing up the solution, getting you connected to the trading partner, the retailer, distributor that you're looking to connect to and handle any of the testing fees or testing processes that are required, and then you're going to have your ongoing fees.

23:08
Emily Curran
So think of that for just the maintenance of the platform, all of the ongoing support. And then typically with EDI, because it is transactional based, there might be some transaction or document fees that are baked into part of that ongoing cost. I know we've seen some other providers out there that will charge by kilocharacter. If you don't know what a kilocharacter is, just think of it as like whatever the gigabyte of data is. So if you have a dropship order, that's going to be a smaller document, like one kilocaracter, but if you're maybe shipping to multiple DC's or stores, that's going to be a larger document and that could be four kilocharacters.

23:46
Emily Curran
So I think it's important to just understand again, what your provider is giving to you and how that cost works to make sure you're not getting any of those hidden fees or things you might not understand. And then of course, you know, with some providers, you might have to hire some staffing or do some of the maintenance, the connections yourself. So there might be just some of those ongoing staff and training fees that you got to take into consideration as well.

24:10
Daniel Scharff
Okay, some training fees, overall setup and maintenance fees that kill a character that sounds like an actor in a Quentin Tarantino movie. I've never heard that before. I like it though. So I don't know, maybe you could say like a couple thousand bucks, maybe per account per year or something like that. If you're doing some decent volume.

24:32
Emily Curran
If you're doing some decent volume, yes, I would say, you know, again, at least from like the SP's perspective, many of our customers are emerging brands. They're getting started with a retailer, distributor and doing EDI for the first time. And so we have easy pricing for them to get started in terms of just talking like a couple hundred bucks. And then again, as you scale. So how many trading partners are you doing business with? What's your order volume, things like that. Usually, at least in our approach, it's a cost benefit analysis. In terms of it scales as you grow as well. So it's not like your volume doubles. You're going to double your pricing. So it's a scalable solution.

25:14
Daniel Scharff
Okay, so when I used to run a brand, I had a CFO who would look at a lot of the deals were doing together and like look at the whole margin of the deal and then think about the EDI stuff. And probably I can imagine taking him one of these opportunities and having approving the whole promotion plan and everything and looking at whether or not we should do the EDI. And I can imagine him looking at these things as like, yeah, if it's big enough, like even if there's a fee there, I'm going to want that because I'm just going to much more quickly be able to understand what's going on. It's probably going to help us reduce our risk of missing some full deliveries and on time stuff and also help me to invoice faster and get paid quicker.

25:55
Daniel Scharff
There probably are a lot of ways that CFO's and COos would really prefer it not just look at it like, oh, I have to pay this thing. But actually there's a lot of value there for a brand when the volume is there. Probably you're doing a one case a year with a big retailer. You're like, this is crazy. I don't want to pay this. We're not going to be shipping a lot. But there is a tipping point. Where do you think that tipping point is for a brand? If you were a brand, when would you even try to avoid it? Because sometimes the retailer can be like, yeah, will you do this? Three D I. And you can be like, well, maybe not yet.

26:27
Daniel Scharff
Is there a point where you would recommend a brand try to push back on it until it makes sense for them?

26:33
Emily Curran
I think that's a great question. I think obviously as a brand, until you're being pushed or asked to do Edi by one of your retailers distributors, it doesn't make sense necessarily to go out proactively, try to figure out how to do it or start to do.

26:48
Daniel Scharff
It the whole thing. To like get set up for the first time.

26:51
Emily Curran
Correct. To get set up for the first time. But if you're already set up and doing EDI and someone else comes to you, I mean, to me it just makes sense to continue to add them to your EDI process because it's giving you as a brand consistency as well in terms of how you're able to manage all the orders across your different business partners. But there's always an Roi, right. And I think you hit the nail on the head in terms of typically you're going to find that the perceived cost to add a connection or maintain an EDI solution, actually there's more benefits to doing that than if you just did it manually.

27:25
Emily Curran
And again, that could just be the manual processes and the staff that you're having to that dedicated dedicate to those activities versus, you know, having them focus on selling more of your product or growing your brand. But I'd say usually what we find is if you're getting 20 orders a month, couple order 100 orders a year, that's usually a good indicator you should say yes to EDi. And then of course, if you're going to push back, just understand what those potential implications could be to that relationship because you may push back and your retailer may give you an exception or they may say, no, I'm not going to do business unless you can handle.

28:03
Daniel Scharff
Got it. Okay. Very fair. Thank you. You know, as early brands, we always want to know that, like, how scrappy can I before I just really need to do this. And, you know, our sincere wish is for everybody to be successful and flourish and have to have all this stuff and want it eventually. But obviously everybody should defend their margin. You know, like you'll pry the margin out of my cold, dead hands with, you know, every. But, like, you want this to be a value add, not like, oh, another thing that I have to stack onto my total bill. Okay, so this is a great understanding of what EDI is generally. And then what about SP's commerce specifically?

28:42
Daniel Scharff
And I think for most brands, probably you hear about it because when they tell you a retailer is like, oh, you have to get set up with EDI for a lot of them, I think Sp's is the default. Like been around the longest, very well known. And even maybe some people think like that is EDI. And like, SP's commerce are probably interchangeable terms for a lot of people, although there's some other stuff out there. So what differentiates sp's commerce that, you know, has made it that kind of a company with the positioning in the market that it has?

29:13
Emily Curran
I mean, I think just your point about a lot of folks associate sp's and EDI. I mean, our mission is to be the world's retail network. And I think today we have been doing that. We consider ourselves retail experts. We've been perfecting this craft for over 20 plus years and we built some really strong relationships with retailers, so, or grocers or distributors. So as they are making changes to their business, we're typically the first ones to find out to be able to make those changes on behalf of our customers.

29:46
Emily Curran
And two, when you think about how these retailers are expanding their own relationships with vendors to offer more curated selections for their own customers a lot of times, similar to your point, like they don't know how successful that relationship might be, but they know that SP's has the people to be able to onboard those vendors very quickly to their EDI program and give those vendors a solution that's super easy to use. So a lot of times they're going to refer those vendors back to us and those vendors are then partnering with SP's as they begin that EDI journey as well.

30:22
Emily Curran
So I think it's, you know, not only the retail expertise and the relationship that we have with the retailers that differentiates us, but it's also that full service approach that we take where we know you as listeners don't want to be an EDI coordinator. Again, you don't want to do any of the heavy lifting that comes with onboarding an EDI solution, maintaining that over time you just want to focus on your business and that's where SP's comes in. And we take care of all of the onboarding, all of the testing. We help you manage that ongoing. And really we're here to help grow your business. We want our customers for the long term.

30:59
Emily Curran
And it is so rewarding to be able to see them maybe start with one distributor, one retailer, but then grow their business and evolve and additional connections, whether that's a three PL, a broker, or eventually getting into system automation and integrating with their business system of record.

31:16
Daniel Scharff
Okay, so that's really helpful if you're then one of these early brands and now you have to get set up on EDI and you're choosing because there are some other options out there. It sounds like what you would say the biggest points of differentiation or how should they choose is think about, yeah, who has the breadth and is going to be kind of on top of the changes pretty quickly, who's going to be aligned already with the most number of retailers and distributors out there. And obviously people are going to want to check prices and everything. Any other factors you think that people should look at when they're considering one of the providers?

31:54
Emily Curran
Yeah, I think that's part of the challenge. Right. You're a new brand, you're being asked to do EdI, you Google EDi and there's like a million options that pop up and it's hard to understand what separates one option from the other. And I'm sure you don't have a ton of time either to do all of this research and evaluate. So you're gonna pick like the top two or three that pop up. So I think in addition to the points that you mentioned, it really comes down to, is Edi going to be a core competency of your business, just like you probably made your decision to outsource to a three po, or maybe you just looked at your business and what was the last task? You decided that, hey, it's mission critical to operate the business, but it's not a core capability that we have.

32:33
Emily Curran
We're going to go partner with a full service provider. I think, again, that's what it comes down to because there's a lot of providers out there. You're going to see ipass providers, you're going to see managed service providers. They all might sound the same. And that's where I think it comes down to understanding what are those tasks they're going to take on your behalf, and are they just giving you a platform that's going to allow you to do the mapping yourselves, or are they actually enriching the data and adding value to it?

33:00
Daniel Scharff
So those ones like iPass managed services means those are less comprehensive services, a little bit more manual stuff?

33:10
Emily Curran
Not necessarily manual, because I do think some of them have the ability to integrate or automate some of those processes. But I think an example I would use is with an ipass provider, a managed service provider, they might just, again give you the technology. And when that order comes in, it's still going to have some of the EDI segments and code. If we go back to how do I know where to ship my order? There is going to be an address on there, but in EDI language, that's going to have like an n one segment. So if anything I just said there scares you. That's probably your indication that you don't want to hire an EDI coordinator. You don't want to use one of those platforms. You want that full service provider that's going to give you that PDF of the order.

33:52
Emily Curran
It's all you're going to translate and transcribe that shipping address for you. So those are some of the questions I think you just got to get down to the bottom of as you're looking at these providers is, again, are you giving me just the technology and I still have to provide the staffing and the skillset, or are you actually becoming my eDI department and I don't even need to spell EDi?

34:15
Daniel Scharff
Okay, that makes sense. So really thinking about, like, what is the full scope of what they do? How, like, is there going to be any kind of friction points between us and the retailers with any of this stuff? And yeah, basically like given that I don't want to spend all my time on doing this stuff, how much of my time will I have to with some of these different options? So. Okay, great. That's really interesting to hear. Okay, so just so everyone can actually properly visualize it, what is it like when you actually set up EDI for the first time? What are the steps you go through?

34:48
Emily Curran
Yeah, well, it's simple if you're leveraging Sp's because we're going to do all of that onboarding for you. So typically we just need to know who are you trying to connect to? There's probably going to be again an EDI language, some id, internal identifiers that we need to know in order to route the data correctly. So again, think of it just like the mail system. When you're sending mail, you got to get it from point a to point b. So that's the same with EDI, but we take care of wiring all of that up for you. And then usually you're going to test. Right. And again, it's not just validating that the order is being sent correctly from the trading partner to you, but then you got to make sure you understand all of the business process and implications involved.

35:30
Emily Curran
Again, going back to confirming the order, shipping it and invoicing it. So with SP's, that's something we fully walk our customers through. So we do everything from the actual design and configuration of the solution, really understanding kind of your business process, your goals, your objectives, recommending the best solution to achieve those, and then walk you through order to cash process and how you would then actually go about fulfilling that order via EDi.

35:59
Daniel Scharff
Okay, maybe last question. One thing I wanted to ask before, because you said you've been around over 20 years, what actually has changed in EDI? Okay, back in those days, probably even fewer people at the warehouses or whatever were really on systems the way that they should be. What kind of updates do retailers make these days or the last five years or something or stuff that you see updating in the future to make all of EDI in general work even better?

36:30
Emily Curran
Yeah, absolutely. I think one of the biggest changes we've seen is EdI traditionally X twelve format, but we've seen a lot of folks navigate to APIs, XML, so just more modern ways to communicate this information. And because it's tied to business process, I mean there's lots of changes that are happening from an EDI perspective. I think recently looking up Keihe, they had over 60 changes. I think in the last two years that we've helped manage and make sure our own customers were up to date on. And that can be everything from I added a field to my requirements to I'm adding a new order management model I need my customers to support, or a new document type that I want to support via EDI. So the changes kind of run that gamut.

37:20
Emily Curran
And that's where I think we've seen a lot evolve, too, in terms of the number of retailers or distributors that are adopting additional documents, like that advanced ship notice because of the visibility that it gives them. So not only has the protocol evolved, but really the business process and how brands and retailers and distributors and any supply chain party can really communicate with each other more effectively. And we're seeing that happen where three pls are becoming involved with EDI as well.

37:48
Daniel Scharff
All right. And just because you talk to so many customers, is there, like, one thing that you would always recommend to people when you talk to them? Like, hey, you maybe not are taking advantage of this thing that you can actually do through EDI and you should know about it. Any low hanging fruit or common tip that brands should just be aware of as they're getting set up, or just an insider tip?

38:12
Emily Curran
Yeah, that's a good question. And maybe there's two parts to that. So, like an insider tip. Again, I think people sometimes just equate EDI as a portal. I'm receiving my documents via a portal, but really, it goes beyond that. Like you said, when you're automating, you're not just automating that exchange of data. You're trying to automate business processes and reduce those manual steps. So I think a lot of customers that I talk to are surprised that we could integrate with their system, for example. And that's just not something that was on their radar. And part of it is, I can't blame them, right? You're a new brand. You don't know what EDi is. You're just trying to get set up and figure it out. And then there's that cost aspect, too.

38:51
Emily Curran
So that's where I think it's okay to take that crawl, walk run approach, get set up with EDI, be able to say yes to those partnerships that are requesting it, get your feet wet, learn how to use it, go grow that business. And then when you're at a point where your business is ready, just look at how you can continue to automate and scale.

39:11
Daniel Scharff
All right, cool. Well, very good answer. I think that'll be really interesting for a lot of people either already using EDi because they're in that great place where they're getting big orders from big people or they're just trying to understand it and now will be much less fearful when they get the Ru Edi compliant checkbox and they'll know what it means. So thank you so much Emily, for spending the time with us. Thank you a lot to SP's commerce as well for the partnership. We really appreciate when people support our community here and I hope that all of you got as much out of this as I did. Thanks again.

39:46
Emily Curran
Absolutely. Thank you.

39:47
Daniel Scharff
Bye everyone.

39:50
Speaker 3
All right, everybody, thank you so much for listening. If you enjoyed the podcast today, it would really help us out if you can leave a five star review on Apple Podcasts or Spotify. I am Daniel Scharff. I'm the host and founder of Startup CPG. Please feel free to reach out or add me on LinkedIn. If you're a potential sponsor that would like to appear on the podcast, please email partnerships at. And reminder to all of you out there, we would love to have you join the community. You can sign up at our website, startupcpg.com to learn about our webinars, events and Slack channel. If you enjoyed today's music, you can check out my band it's the super fantastics on Spotify music. On behalf of the entire startup CPG team, thank you so much for listening and your support. See you next time.