EDI 846 Explained

Updated: March 3, 2022

When a retailer enters into a dropshipping relationship with a brand, one of the most important pieces of information it needs to satisfy its customers is around the brand’s inventory. Which products are in stock and which products are out of stock? Does a brand have adequate inventory levels to satisfy customer demand? Without accurate answers to these questions available in real time, retailers risk selling out-of-stock products to their customers and disappointing them.

If your trading partner’s store is on a modern ecommerce platform like Shopify or BigCommerce, you can sync their inventory with Convictional and get real time inventory updates. 

But what if your trading partner, whether a retailer or a brand, uses custom systems and interacts with you with EDI files? That’s when you’ll need to use EDI 846 inventory update documents to trade with them. 

In this article, we’ll explain what EDI 846 documents are and why they’re used. We’ll also share an example of an EDI 846 document and walk you through it so that you know what to look for when you’re sending and receiving 846 documents with your partners. 

What is an EDI 846 document?

EDI 846 Inventory Update documents (also known as EDI 846 Inventory Inquiry/Advice) are used to communicate the inventory levels of products.

EDI 846 documents help retailers answer the question: What is the currently available inventory of my partner’s products?

846 documents are the most frequently transmitted documents in a retailer-supplier EDI relationship — they’re usually processed every hour to provide accurate information about a brand’s stock levels to a retailer. Suppliers send a single 846 representing their inventory, and retailers receive a separate 846 for each seller they are partnered with.

846 documents are formatted in the American National Standards Institute (ANSI) x12 EDI standard. 

EDI 846 documents help retailers answer the question: What is the currently available inventory of my partner’s products?

Intended benefits of using EDI 846

Retailers are able to streamline their dropship supply chain with EDI 846 files. Here are the intended benefits of EDI 846:

1. Accurate inventory levels - retailers get an accurate picture of a brand’s inventory levels with EDI 846 documents. This helps them understand which product inventory is running low and which stock items are on backorder with their supplier.
   
   
2. Higher customer satisfaction - retailers can satisfy their customers better with EDI 846 files. If an item is out of stock, a retailer can label it as such on their website or delist a product until it’s back in stock. This ensures that they don’t oversell any products or miss their promised delivery times.
   
   
3. More informed brand sourcing - if a brand’s products are frequently going out of stock, retailers can add additional brands with similar products to provide product substitutions to their customers. 

Key elements of an EDI 846 document

Here’s an example EDI 846 file:

If you’re unfamiliar with EDI documents, the data elements contained in a single file can be overwhelming. Let’s break it down further:

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ST*846 refers to the 846 transaction set — this identifies the file as an 846 document.

846 files share line item information in LIN loops. Each of these loops provides inventory information pertaining to a specific product. 

The products in this example can be identified by their Universal Product Code (UPC) barcode, denoted by the barcode number followed the “UP” Product/Service ID qualifier. The QTY ID shares quantity information about the product. In this example, we see that the Andorra Almond variant has one item in stock, as on June 29, 2021.

These are the most important codes to look out for in your 846 documents. When there’s a change in a product’s QTY code, retailers are made aware of which products have a new inventory count. 

A few other codes in 846 documents that are worth mentioning include:

1. BIA: Beginning of Inventory Inquiry/Advice.
   It indicates where the content of the 846 file begins.
   
   
2. CTT: The number of line items in the file.
   It sums up the number of LIN loops in the document.
   
   
3. PID: Product Description/Item Description.
   While UPC codes are enough to identify the product variant, PIDs are helpful for merchandisers to see which products are mentioned in each 846 file. 
   

These codes are identifiers that enhance the quality of the information shared in 846 files, but they don’t affect the trade operations between a retailer and their supplier as much as UP and QTY codes do.

Looking to learn more about EDI? We have some more resources for you:

• EDI 850 Explained
• EDI 856 Explained
• What Is An EDI Requirements Document?

Connect your EDI 846 files through Convictional

EDI has always been a limited data protocol because it requires both parties in an EDI transaction to support the format. Retailers face the challenge of trying to convince brands that don’t support EDI to get set up, while DTC brands built on Shopify have never heard of EDI until they go down the B2B route. 

At Convictional, we’ve given EDI a major overhaul. If you’re a retailer that uses EDI to transact with your suppliers, you don’t need to force them to use EDI as well. You can offer them a way to sync their store with our one-click Shopify, WooCommerce and BigCommerce integrations. 

If you’re a modern marketplace that wants to transact with a classic brand that uses EDI, we give you a step-by-step solution that can save you months of implementation time. 

With Convictional, you’ll be able to transact with any brand, regardless of how they choose to transact with you. Contact us today to get started.