Costco EDI: How to Meet Compliance and Onboard Faster

Costco is one of the largest retailers in the world, and suppliers that want to get their products on its shelves need to meet strict electronic data interchange (EDI) requirements. Costco uses EDI to handle purchase orders, invoices, and shipping notices across its vast distribution network. With such an extensive supply chain, EDI is essential for tracking every supplier and shipment across all their channels.

Many retail EDI providers offer a connection with the Costco electronic data exchange system. The challenge is that many businesses run into long onboarding timelines when working with legacy EDI providers. Those delays can create compliance risks, increase costs, and slow down the revenue opportunity that comes with being a Costco supplier. Modern web and API-first EDI solutions provide a quick and reliable way to connect to Costco and other large retailers, minimizing time to revenue and eliminating most manual processes.

This guide explores Costco’s EDI system requirements. It will help you prepare for the most common challenges suppliers face and explain why Orderful provides the fastest way to achieve Costco EDI compliance so you can start transacting quickly and confidently.

What Is Costco EDI?

Costco EDI is the retailer’s required electronic data interchange system for suppliers. It allows Costco and its trading partners to exchange critical business documents, including purchase orders, invoices, and shipping information, in a standardized digital format. By replacing manual data entry with structured EDI messages, Costco ensures every transaction is accurate, timely, and easy to track across its vast supply chain.

Costco mandates EDI because its distribution network depends on speed and consistency. Without automated communication, errors in purchase orders or shipment notices could ripple through warehouses and stores, causing delays, shortages, or costly chargebacks. EDI reduces these risks by standardizing the way suppliers communicate, making it easier for Costco to confirm shipments and keep store shelves stocked.

For suppliers, connecting to Costco’s EDI system means more than just meeting requirements. It delivers several key business benefits, including:

• Faster processing so purchase orders, invoices, and payments move without delays.

• Greater accuracy by eliminating manual data entry errors.

• Stronger relationships with Costco through reliable, compliant transactions.

Costco EDI Requirements

To do business with Costco, suppliers must exchange a specific set of EDI documents. These transactions keep Costco’s distribution network synchronized and ensure proper tracking of every step in the supply chain process. Missing or mishandling any of these documents can result in delayed payments or costly financial penalties.

Here are the core EDI documents that Costco requires:

850 – Purchase Order (PO)

Costco issues an EDI 850 to communicate what products they want, in what quantities, and when they need them. Suppliers must acknowledge and fulfill these orders accurately.

856 – Advance Ship Notice (ASN)

The EDI 856 communicates what’s in a shipment and when it will arrive. Costco requires the ASN before delivery so they can prepare their warehouses.

810 – Invoice

Suppliers submit the 810 invoice for billing. It must exactly match the purchase order and shipment details for payment to be processed.

997 – Functional Acknowledgment

This is a confirmation message that verifies Costco has received your EDI transmissions. It’s mandatory for every document exchange.

Required Costco EDI Documents

Suppliers connect through Costco Connect, the retailer’s trading partner portal. This system enforces validation rules, testing standards, and communication protocols. Without an EDI provider that’s already mapped to Costco's portal, onboarding can take far longer than expected.

Common Challenges With Costco EDI

While they can't do business with Costco without an EDI setup, many suppliers run into roadblocks when trying to achieve compliance. These challenges often stem from outdated systems and slow-moving providers that weren’t designed to keep up with today’s retail pace.

Long Onboarding Timelines

Traditional value-added networks (VANs) and legacy EDI provider onboarding times often take weeks or even months to complete, from connection testing to final certification. That can put revenue on hold at the exact moment suppliers are eager to start shipping products to Costco.

Complex Mapping and Compliance Testing

Each trading partner has unique formatting rules. With Costco, document mapping and validation can be time-consuming if your provider doesn’t already support Costco’s specifications.

Hidden Costs

Legacy providers may charge per-document or per-kilocharacter fees, adding up quickly for suppliers processing hundreds of Costco transactions each week. This can cause a drag on the budget and increase the total cost of ownership (TCO) over time.

Manual Error Handling

When an error occurs, many EDI systems still require manual intervention. That slows down order processing, increases the chance of missed shipments, and can introduce human errors.

These challenges delay compliance, threaten supplier relationships, and make it more difficult to keep pace with Costco’s large and fast-moving supply chain.

How Orderful Simplifies Costco EDI Integration

Orderful's web EDI platform prioritizes quick onboarding and strong retail partner compliance. Built as an API-first, cloud-native platform, Orderful gives suppliers the tools to meet Costco’s requirements in days instead of months.

API-First Connectivity

Instead of relying on traditional VAN infrastructure, Orderful connects directly through modern APIs. Orderful can speak directly to Costco's interface without configuring customized connections. This means faster transactions, fewer bottlenecks, and a light IT lift.

Prebuilt Costco mappings

Orderful already supports Costco’s EDI specifications. That eliminates weeks of custom mapping and compliance testing, so suppliers can get certified and start transacting almost immediately.

Swift Onboarding

Most Orderful customers go live with Costco EDI integration in fewer than nine days. This is a fraction of the time most legacy providers complete partner connections.

Flat, Predictable Pricing

Suppliers pay a flat per-partner fee with Orderful, not per-document or kilocharacter charges. This makes costs transparent and easier to budget.

Real-Time Monitoring and Error Resolution

Orderful’s platform validates documents as they’re sent, flags issues instantly, and helps suppliers correct them before they cause delays or chargebacks.

For suppliers under pressure to connect with Costco quickly, Orderful offers a faster, simpler, and more reliable alternative to legacy EDI solutions.

Step-by-Step: Getting Started With Costco EDI

Implementing Costco EDI doesn’t have to be overwhelming. With the right platform, you can follow a clear process to achieve compliance quickly and begin your retail relationship with high marks from Costco.

1. Define your Trading Documents

Start by identifying the core documents Costco requires, including the 850 purchase order, 856 advance ship notice, 810 invoice, and 997 functional acknowledgment. These are the building blocks of every transaction with Costco.

2. Connect to Costco Through Orderful’s API-First Platform

Orderful already supports Costco’s specifications and integrates directly with Costco Connect. That means you can connect without weeks of custom development or manual configuration.

3. Validate and Test in Real Time

Use Orderful’s built-in validation tools to confirm your documents meet Costco’s compliance rules. Issues are flagged instantly, so you can resolve them before going live.

4. Prepare UCC-128 shipping labels

Costco also requires suppliers to generate and attach UCC-128 shipping labels to each carton or pallet. These labels carry a Serialized Shipping Container Code (SSCC) that ties directly to the advance ship notice (856). 

5. Go live in days, not months

With Orderful, most suppliers are live and compliant in under nine days, dramatically faster than most legacy providers.

Streamline Costco EDI Integration for Long-Term Success

Costco is a high-value retail partner, but meeting its EDI requirements is no small task if you’re stuck with outdated providers. Every delay in onboarding risks lost revenue and strained relationships, right when you want to be moving products onto Costco shelves.

Orderful gives suppliers a clear path forward. With an API-first, cloud-native platform, prebuilt Costco mappings, and real-time validation, you can onboard in just a matter of days. Predictable pricing and automated error handling make it easier to transact the way that Costco expects, so you can focus on delivering products instead of troubleshooting transactions.

If you’ve recently secured Costco as a trading partner, now’s the time to simplify your EDI integration. Contact an EDI expert or book a demo today to see how Orderful accelerates Costco EDI compliance and helps your business scale with confidence.

FAQs About Costco EDI

What is Costco EDI?

Costco EDI is the retailer’s electronic data interchange system that suppliers must use to exchange purchase orders, invoices, and shipping notices in a standardized format.

Which documents are required for Costco EDI?

Suppliers must be able to process the 850 purchase order, 856 advance ship notice, 810 invoice, and 997 functional acknowledgment.

How long does it take to onboard Costco EDI?

With legacy providers, onboarding may take months. With Orderful, most suppliers are live in fewer than nine days.

What happens if I don’t comply with Costco’s EDI requirements?

Noncompliance can delay shipments while Costco waits for the supplier to correct and resubmit. This can disrupt payment schedules and trigger financial penalties or chargebacks.

Why is Orderful the best choice for Costco EDI integration?

Orderful provides API-first connectivity, prebuilt Costco mappings, and flat pricing, making compliance faster, simpler, and more cost-effective.