Estimated reading time: 4 minutes, 39 seconds

SignUnderDuressSince the middle of last year I've noticed a trend that I had been waiting to comment on until later, but with yet another grouping of retailers doing the same old thing, I thought it time to say my peace. This trend has to do with Retailers either requesting or requiring suppliers to use their independent portal site, or requiring suppliers to use an exclusive providers to conduct electronic trading. Many of my customers have been reaching out to me with complaints regarding letters from their customers (Retailers/Distributors) requiring them to switch to an exclusive EDI provider or to use a internally created EDI portal.

I can see how a Retailer may be interested in having suppliers use a vendor portal provided for less technical suppliers. This should not be designed to replace the traditional EDI, rather used for those suppliers that do not have EDI available to them. In addition this is a great method of sharing more proprietary (supplier specific) information such as scheduled payables, compliance documentation etc.

For those suppliers interested in using a retailer's Intranet portal, I do want to alert you that while it appears this method is free; free does come art a price, and that is your internal resources dedicated to managing this process. If that team is managing one or maybe a couple of retailers, then this way may make sense. However using this process with multitude of customers is not. Remember that for each of your customers that has their own independent portal site, this will mean continually accessing each of these throughout the day, thus consuming high maintenance and resources. Just think about this if your resources are managing 10 or 20 customers this way.

With the varying number of EDI service providors available to trading partners these days, I am amazed that a Retailer or Distributor would even consider building and maintaining a supplier portal site. The cost of building is quite high and on-going updates has got to be a nightmare, especially when companies are looking at reducing labor cost. For those that are considering building out a portal; make sure that your evaluation includes all of the costs associated with this effort. Also, make sure that you consider alternatives to your trading partners; many other Retailers have existing portals and quite often they are being shelved, meaning all that development work gets trashed.

It does concern me that buying organizations are now stretching out and requiring their partners to use an exclusive EDI service providers. In the days where "Collaboration" is the talk of the town, why aren't you allowing your suppliers to use whatever method they feel meets their business needs, and use a provider of their choosing? There are many providers in the marketplace that provide excellent EDI services for a supplier, why not allow them to use a company that they are happy with. Obviously, if your provider is not meeting expectations,  the supplier should certainly investigate using another provider; after all they do need earn the business.

For those retailers/distributors that are looking at the exclusivity play "what's this all about". If this is a way to reduce or eliminate VAN fees, there are other methods to communicate data besides the VAN. Many like Wal-Mart are requiring connecting directly through AS2.

I have learned that some retailers are getting kick backs from their VAN or provider to a point where they believe EDI can now be a profit center. If this is your reasoning; whatever happened to everyone paying their own way? Companies like Dillard's are now charging large fees per year ($1500 is a number I've heard) for a supplier to use their own EDI provider or VAN instead Dillard's VAN GXS. ToysRus Imports will only allow data to go through Easylink. REI just sent out a letter offering Retailer funded portal services using Sterling; this is a kin to my point earlier, thus this may as well be a Retailer built and maintained intranet portal.

If the reason for this change is that the retailer has issues with the quality of data from EDI Service Providers, wouldn't make more sense to work through the issues or recommend a listing of Preferred Providers verses limiting the method of data flow to only one. Having all of your eggs in one baskets can lead to scrambled eggs if you get my drift!!!

I generally don't interfere with what goes on between partners and the requirements of exchanging data with one another. However it concerns me that we're missing the point of electronic trading, it's about collaboration, partnering with one-another toward a common goal of getting product to the consumers at a low cost yet providing visibility on the status of the orders/shipments. If everyone pays their fair share of the cost of data flow I feel that this is the best interest for both worlds. Retailers; you're fooling yourselves to think that the that the costs that are now being pushed down to your suppliers will not re-appear in higher prices of the product. Let's make this simple, everyone gets a choice.

"Partnership" – Webster's Definition -

1 : the state of being a partner : participation
2 a : a legal relation existing between two or more persons contractually associated as joint principals in a business b : the persons joined together in a partnership
3 : a relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities

Another definition - More generally, a relationship of two or more entities conducting business for mutual benefit.

My favorite word above "mutual benefit".

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