Electronic Data Interface (EDI)
What is it?
Electronic Data Interface is a generic term for conducting automated, secure purchasing over the internet on a business-to-business basis. Using proprietary software, bookstores create purchase orders and transmit them directly to a vendor’s computer. The vendor acknowledges the PO and invoices the bookstore via the same software.
Why do we care?
EDI has become so prevalent that many bookstores will no longer purchase any other way. If you want to sell to the Christian market, the college bookstore market or chain book stores, you must either provide EDI capability yourself or sell through a wholesaler or distributor that does provide it. This is one of the reasons large chains won’t buy directly from small publishers. If the trend continues, soon we won’t be able to sell to bookstores at all unless we have EDI capabilities. They don’t want to order via the old fashioned systems of FAX machines and email.
History
Many vendors have developed EDI software programs or customized existing programs. Ingram and Barnes and Noble each have their own, for example. In 1984 the association of college bookstores developed its own. That system is now used in 90% of all college book stores. The Christian bookstore association developed its own. Recently Bowker purchased both of these large systems to add to its own large network.
Levels of sophistication
Large publishers have software that ties to the buyer’s software in an intimate way. When the buyer places an electronic order, the information automatically triggers shipping instructions, creates an invoice, sends information to the bookkeeping software and inventory tracking software. This level of sophistication requires expensive proprietary software. Historically the software alone has cost over $100,000. Today it can be purchased for as little as $6,000.
With high speed internet access becoming more common, it is now possible for an EDI provider to maintain the software on one large central computer and let publishers and bookstores access it from their own computers. This breakthrough allows much smaller publishers access to EDI. The big player is Bowker. Their "pubnet" system, www.pubnet.org has over 3,000 bookstore subscribers and hundreds of publishers, including Random House, Penguin, Simon and Schuster etc. The cost is much more reasonable. There is a one time set up fee of $750, an annual fee of $200 for “Book Industry Locator” service which decodes the SAN of ordering stores, a monthly fee of $50, plus a charge of $.75 per document (purchase order, invoice etc.) In Colorado, only Fulcrum Publishing and Mountain Book Company are members. Pubnet requires each publisher to process every purchase order within twenty four hours, and it gives special discounts to publishers who process every order within fifteen minutes.
- Mountain Book Company: A Virtual Distributor
This is a completely new wholesaling model that makes the benefits of EDI available to even smaller publishers.
In December of 2005, Kenn Amdahl created Mountain Book Company to serve as an EDI conduit for publishers like his own Clearwater Publishing. Mountain is a subscriber to Bowker’s pubnet, just like Random House is. Selected small publishers (like Clearwater) are considered “imprints” for the purposes of EDI. Mountain receives the electronic orders and sends electronic acknowledgements and invoices back. It emails shipping instructions to the individual publisher “imprint.” The publisher ships the books directly to the book store. Mountain collects the money from the book store and sends a check to the publisher.
This hybrid has advantages and disadvantages. It is obviously more labor intensive than a pure integrated EDI system so labor costs must be offset. On the other hand, for a small publisher, the at-risk dollars are much less. There is a one time set up fee of $200 plus a five dollar per month maintenance fee, collected annually in advance. Document fees are passed through to the publisher. For uniformity, Mountain “buys” from publishers at a fifty percent of retail discount. It sells to book stores at a 45 percent discount. The five percent difference covers Mountain’s expenses. Books are sold on a “non returnable” basis. Bookstores must order a minimum of five books per order to receive this discount, but can order single copies as well.
Although publishers still must do their own marketing, there will be some increased visibility for member publishers, including an email to all 3,000 bookstore members.
If you think your publishing company might be a good fit for virtual distribution via Mountain, click the link on the right side of this page labeled "join."
Whether or not you become part of the Mountain family, every publisher should sign up with Bowkerlink so they can edit their own entries in Books In Print, and also add wholesalers like Mountain. Go to bowkerlink.com www.bowkerlink.com
