APIs vs. EDI: Why manufacturers and distributors need both

The conversation around APIs and EDI often presents a false binary: modern versus traditional, flexible versus structured, agile versus stable. This either/or framing misses what many successful manufacturers and distributors already know: These technologies work much better together than apart.

If you’re trading with major retailers like Walmart, Target, and Macy’s, treating APIs and EDI as competitors rather than complementary tools is holding you back.

Here’s why this binary thinking falls short and how you can use both EDI and APIs to strengthen your retail partnerships.

The enduring value of EDI

EDI has powered supply chain communication for decades, providing a standardized framework for exchanging purchase orders, invoices, and shipping notices. Here are the main reasons for its staying power:

• Proven standardization: EDI follows globally recognized protocols like ANSI X12, ensuring consistent communication between trading partners and reducing costly errors.
• High-volume reliability: After years of refinement, EDI systems handle massive transaction volumes with minimal downtime—critical for manufacturers sending thousands of orders daily.
• Retail compliance: Major retailers require EDI compliance, making it non-negotiable for suppliers in sectors from jewelry and apparel to health products and food.

While EDI might seem less flexible than newer alternatives, its structured approach creates predictability and stability—exactly what you need for high-stakes retail relationships where mistakes can cost you thousands in chargebacks.

The advantages of APIs

APIs, on the other hand, bring different strengths to the table. They connect systems dynamically and offer real-time data flow and integration with various applications. APIs really shine when:

• Speed matters: APIs enable immediate data transmission, helping you respond faster to inventory changes, customer orders, or market shifts.
• Systems need connection: APIs link your various platforms like cloud software to warehouse systems and create workflows that cross departmental boundaries.
• Custom solutions required: Unlike EDI’s standardized approach, APIs allow greater customization for unique business requirements.

A false binary

EDI excels with high-volume, repetitive transactions with established retail partners—the backbone of your trading partner relationships. Purchase orders, invoices, and shipping notices flow between suppliers and retailers, following predictable patterns that EDI handles perfectly. Meanwhile, APIs cater to real-time, ad hoc integrations and rapid response scenarios that EDI alone wasn’t designed to manage.

Once you learn this complementary relationship, you can maintain EDI for core retail compliance—documenting properly, eliminating chargebacks—and deploy APIs for real-time inventory tracking for connecting with new sales channels. It’s the best of both worlds: reliability and adaptability.

The combination of EDI plus APIs also bridges old and new systems. Most vendors operate with a mix of legacy software and modern platforms. Quality integration tools let you maintain EDI compliance with retail partners while adding API-driven workflows where you need them. This creates a truly adaptive tech ecosystem that evolves without disruption.

Create your hybrid strategy

To maximize both EDI and APIs, start by mapping your processes. Review your current order management workflow and identify where manual steps create gaps. Which retail partners generate the most in chargebacks? Where do your teams spend the most time?

Next, choose a solution that allows EDI and APIs to work together. Look for ones that adapt to your processes rather than forcing change. The best integrations connect directly to your ERP system, whether you use NetSuite, SAP Business One, QuickBooks, or custom software.

Finally, align with your trading partners. Understanding their requirements and timelines helps you implement solutions that maintain compliance while offering the flexibility your business needs.

The most successful retailers and their suppliers already use hybrid approaches:

• Major retailers: Companies like Walmart use EDI for standard order processing but offer APIs for real-time inventory updates and order tracking.
• Online marketplaces: Amazon processes core orders and invoices through EDI while providing APIs for marketplace integrations and custom applications.
• Mid-sized manufacturers: Smaller suppliers use cloud-based EDI platforms with API connections, gaining benefits from both technologies without massive infrastructure investments.

Twice the power: APIs & EDI

The idea that you have to choose between APIs and EDI is simply outdated thinking. Each technology offers unique strengths and when combined, they create more resilient and efficient supply chains.

By implementing a hybrid approach, manufacturers and distributors can stay compliant with trading partners and build the flexibility needed for growth—all without upending your best processes.

Want to learn how Tech85 customers use both EDI and APIs to eliminate chargebacks and automate order processing? Book a demo with our supply chain experts.