You have choices regarding your value-added network (VAN). However, some companies mislead those new to EDI when it comes to VAN selection. Here's what you need to know.
You are not required to use the value-added network of your current electronic data interchange (EDI) provider. However, you could work with an EDI provider who implies you must use their VAN. Unsuspecting customers take these words as truth and sign on, not realizing they have a choice. They are subject to their provider's costs and don't get the chance to shop around. If you come across this idea, please press your provider for clarification.
Abort the mission if a new trading partner says you have to be in the same value-added network! Indeed, you need a VAN to begin working with said partner. But you aren't required to be on their VAN. Any indication otherwise raises a red flag, in my opinion. Therefore, I would think twice before doing business with this company.
Be wary if your EDI sales rep isn't upfront about your VAN options. It's misleading when the representative begins the conversation with VAN setup questions. Here are some conversation starters that raise a red flag.
If a sales rep begins with the assumption that you are using their VAN, turn the conversation to price.
Many VAN providers offer a range of services with customization options. Others offer hearty packages with all frills and no basic plan. Avoid VAN packages loaded with benefits if you don't need bells and whistles.
Frequently, VAN pricing is based on the number of kilo-characters transmitted each month. Providers calculate the monthly bill by adding the number of KCs in each purchase order, invoice, advanced ship notice, and all other EDI transactions and multiplying by the rate in your contract (typically 5¢ to 25¢ or more).
BOLD VAN offers trader partner pricing. Each month, you pay a fixed price for active trading partners in your network. (The key is “active.”) We do not charge for the total number of trading partners you have set up in our EDI network.
Oftentimes, pricing is based on a tiered structure. When you transmit more data than what is in your tier, the VAN charges overage fees. These fees can be very costly, especially during the holiday season when you are moving more products.
Avoid getting stuck in a fixed contract. Ask the VAN provider important questions before signing.
Some providers offer a brief period for making modifications to the contract. But, unfortunately, clients realize after it's too late that the door has closed for negotiations. It's unfortunate because those new to EDI and value-added networks simply don't know what they don't know.
This article explains what a VAN is and how you can benefit from it. Our blog post includes more considerations when shopping for a VAN.Also, switching EDI VAN providers isn't as difficult as it sounds.
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