Costco EDI Integration Guide: Setup, Labels, Cost & Timeline

Until recently, Costco let some suppliers operate without full EDI compliance. If you were a smaller vendor or shipped lower volume, you could get by with manual processes or partial setups.

That changed in 2024.

Costco now requires full EDI compliance across the board, covering purchase orders, ASNs, invoices, and barcode labeling. If you’re shipping into their distribution network, you’re expected to transmit documents electronically and apply GS1-128 labels to every pallet and carton.

They’ve standardized everything and partnered with SPS Commerce to handle onboarding, testing, and enforcement. Whether you use SPS’s web portal or your own EDI system, you’ll still go through SPS’s certification process to be approved.

The old system was flexible. The new one isn’t. And if your ASN or barcode doesn’t match expectations, expect delays, chargebacks, or worse.

Let’s walk through what changed and how to get set up properly.

P.S. If you don’t want the hassle of managing your EDI and wish you had a reliable partner to handle this, schedule a free strategy call and let’s see if we’re a good fit.

1. What Costco’s 2024 EDI Overhaul Actually Involves

The core of Costco’s 2024 update isn’t just that they require EDI: it’s how specific and unforgiving the implementation has become.

At the center of it is the Advance Ship Notice (EDI 856). Every shipment now needs to be pre-announced with exact contents: carton counts, item-level data, and—if applicable—lot codes for traceability. The ASN must follow Costco’s Enterprise 856 v4010 mapping, which includes hierarchy levels that many suppliers weren’t capturing before.

You also need to apply GS1-128 barcode labels to each pallet and carton. These labels must be scannable, follow Costco’s layout, and match the ASN exactly. A mismatch, whether it’s a wrong PO number, unreadable barcode, or incorrect item quantity, can result in chargebacks or a manual hold at receiving.

Common pitfalls:

• Missing or late ASNs: These interrupt Costco’s automated receiving workflow. In some cases, shipments are paused until a corrected ASN is sent.
• Incorrect barcode data: Even if the label scans, if the embedded data doesn’t match the ASN or order, it triggers an exception.
• Partial EDI setups: Sending invoices by EDI but handling ASNs manually isn’t acceptable anymore. All key documents—850 (PO), 856 (ASN), and 810 (Invoice)—must go through EDI.

Costco also expects real-time coordination. 

The ASN isn’t a document you send after the truck leaves—it’s required before the shipment arrives, so their system can preload receiving data. If you’re using a 3PL, this means they either need to send the ASN on your behalf or provide the data immediately after loading.

2. What Costco Requires You to Send (and How)

Costco expects every supplier to exchange three core documents through EDI:

• 850 – Purchase Order
• 856 – Advance Ship Notice (ASN)
• 810 – Invoice

These are all formatted using ANSI X12 standards, but Costco uses specific versions, most notably the 4010 version of the 856 with detailed hierarchy levels. If your EDI provider doesn’t already support this, you’ll need to update your mappings before testing.

The ASN is non-negotiable.

This is the document Costco is putting the most pressure on. Your ASN must include:

• Shipment hierarchy (shipment > order > item > pack)
• PO numbers and line items
• Accurate quantities per carton/pallet
• Lot codes (for food/produce items)
• Carrier and tracking details
• SSCC-18 identifiers tied to each carton’s GS1-128 label

And the ASN must arrive before the truck does. If the shipment arrives and Costco doesn’t have a matching ASN in the system, your freight may sit in limbo—or worse, get rejected. Late or invalid ASNs also trigger fines.

Barcode labels: GS1-128 only

Costco requires GS1-128 labels on every carton and pallet. These aren’t optional. They’re used to:

• Match physical goods to ASNs
• Automate receiving
• Enable traceability in case of recalls or audits

If even a small percentage of your cartons (e.g., more than 1–2%) have unreadable or incorrect barcodes, Costco may fine $5–$10 per carton, or more if it impacts unloading.

The barcodes must also follow Costco’s label layout, which includes the PO number, SSCC, item code, and other fields in a fixed arrangement. If you’re using a 3PL or co-packer, you’ll need to ensure they follow the same label spec.

3. How to Get Set Up with Costco’s EDI System

Every new supplier is funneled through SPS Commerce, Costco’s designated onboarding partner. Whether you already have an EDI provider or are just getting started, the first step is the same: register with SPS.

After registration, you’ll choose one of two paths:

Option A: SPS Fulfillment (Web Forms)

This is a web-based portal designed for smaller suppliers or those new to EDI. You log into a browser interface where you can:

• View Costco’s purchase orders
• Manually enter ASN data
• Generate GS1-128 labels using SPS’s templates
• Submit invoices electronically

It’s slower than a full integration, but requires no software or technical setup. Costco accepts this method for low-volume suppliers, as long as everything is accurate and timely.

Option B: Full EDI Integration (With Testing)

If you already have an EDI-capable ERP or use a provider like TrueCommerce, OpenText, Orderful, or Cleo, you can connect directly, but you still have to pass through SPS’s certification process.

This includes:

• Submitting test files for 850, 856, and 810
• Demonstrating that your ASNs meet Costco’s mapping and hierarchy standards
• Sending test labels for scan validation
• Resolving any formatting errors flagged by SPS

Until you pass certification, your EDI connection is considered non-compliant, even if technically working. Costco won’t allow live order flow until SPS gives the green light.

Don’t skip the testing phase

Many suppliers underestimate the time and attention required here. Even a working EDI feed can fail validation if the segments don’t match Costco’s expectations.

Costco’s team (through SPS) will provide detailed feedback if you hit issues, but it’s on you—or your provider—to fix and resubmit. Depending on your complexity, testing can take anywhere from a few days to several weeks.

Once certified, your account goes live and transactions begin flowing—either through SPS’s portal or your own EDI system connected through SPS’s network.

4. Timeline and Cost Expectations

Costco’s EDI rollout comes with both a hard deadline and hidden costs that catch suppliers off guard if they’re not prepared.

Timeline to Go Live

Most suppliers need 4 to 8 weeks from start to finish. Here’s a rough breakdown:

Costco set a June 3, 2024, compliance deadline for most suppliers, meaning you had to finish testing and be live by that date. New suppliers are now expected to begin onboarding immediately after approval.

If you’re using SPS Fulfillment (web forms), the timeline is shorter—setup can be completed in under 2 weeks. However, full EDI integration takes longer due to mapping, ERP coordination, and testing rounds.

Cost Drivers

Costco doesn’t charge directly for EDI, but compliance comes with real costs, especially for mid-sized and larger suppliers. Here’s where most of it shows up:

• EDI Software or Provider Fees:
  • SPS Fulfillment: usually a monthly subscription
  • Third-party providers: setup fees + ongoing service fees
• Label Printing Hardware (if not using SPS labels):
  • Industrial barcode printer + GS1-128 label templates
• ERP/WMS Integration:
  • Configuration time to match Costco’s ASN and invoice structure
• Testing/Certification Time:
  • Internal resource time or outsourced IT to handle errors and retesting
• Chargebacks for Non-Compliance:
  • Not a setup cost, but they hit quickly if your ASN or labels don’t pass

If you’re starting from scratch, budget a few thousand dollars minimum for an entry-level setup. Larger suppliers integrating with ERPs and 3PLs often spend $10K–$25K+, depending on complexity.

The more you automate, the higher the upfront cost—but the fewer errors (and chargebacks) down the line.

5. Making It Work With Your ERP, 3PL, and Warehouse Ops

Costco’s EDI requirements don’t just sit in your IT department—they touch every part of your logistics chain. If your warehouse or 3PL can’t support the right label format or send ASN data on time, you’re not compliant.

The ERP system

Most major ERP systems (like SAP, Oracle, NetSuite, Microsoft Dynamics) already support the ANSI X12 documents Costco requires. But support isn’t the same as being ready.

You’ll need to:

• Map the 856 ASN format to include Costco’s hierarchy and fields
• Generate SSCC-18 serial numbers for carton-level tracking
• Tie the ASN data to GS1-128 labels with the correct embedded values
• Ensure the 810 invoice reflects actual shipped quantities, not ordered

Some suppliers also link their invoice (810) generation directly to the ASN—once the shipment is confirmed, the invoice is triggered. That’s the ideal setup, but it requires a tight ERP configuration.

Note: CrossBridge offers a proprietary, fully-managed ERP system integrated with all major EDI providers and retailers. Partnering up with us means avoiding wasteful spending on consultants. 

If you use a 3PL

You’ll need to coordinate closely with them. Two approaches are common:

• 3PL generates and sends the ASN directly (if they’re EDI-capable and have access to Costco’s requirements)
• 3PL sends shipment data back to you, and your system generates and sends the ASN

Both work—as long as the data is accurate, timed correctly, and synced to the correct PO and shipment ID.

Also: make sure your 3PL can print GS1-128 labels with the exact layout Costco requires. If they can’t, you’ll need to ship them label templates—or print and send labels yourself to apply during fulfillment.

Don’t underestimate timing

Costco expects ASNs to arrive before the truck pulls into the dock. That means your warehouse team (or 3PL) needs to finish the ASN process immediately after packing and sealing, not the next morning.

6. How Small Compliance Mistakes Add Up Costs

Most suppliers don’t blow it in one big mistake: they bleed through small ones.

• You forget to send an ASN before a truck arrives. Costco holds the shipment and fines you. If it’s food, the window’s tight—delay means spoilage risk.
• Your labels print, but 3% of them are unreadable. Costco hits you: $10 per faulty carton. On a 1,000-case order, that’s $300 lost to bad printing.
• Your ASN lists 500 units, but the pallet has 480. Now you’ve triggered a mismatch. Costco manually reconciles it and sends you a debit memo for the labor.
• You invoice the full PO but forget to update the actual shipped quantity. The invoice gets flagged, payment is delayed 2–4 weeks, and you burn time explaining.
• Your 3PL forgets to apply the correct SSCC label. The whole truck is flagged. You now owe $500+ in chargebacks, and Costco has a mark against your vendor scorecard.

It’s death by a thousand avoidable issues, most of which happen not in your EDI system, but between your operations and your data.

Once you’re in production, Costco won’t chase you to fix things—they’ll just deduct.

7. A Quick Look at What “Clean” Looks Like

ABC Snacks Co., a mid-size packaged food supplier, started simple. They used SPS’s web portal to get compliant fast and sent ASNs manually for their first few shipments.

On one early order, they mistyped an item code. SPS flagged the error during testing, before Costco saw it, saving them a fine. That mistake would’ve cost them $150 in chargebacks and delayed unloading by a day.

Two months in, they upgraded. Their ERP now handles ASN generation automatically. Carton-level data flows directly from their warehouse into the EDI feed, and labels are printed in real time with GS1-128 specs.

Since switching to full automation:

• Zero label-related fines
• No shipment holds
• Invoices are matched and paid faster

Costco isn’t giving them gold stars, but they’re staying off the radar. And that’s the goal.

8. Need a Partner Who’s Already Done This?

At CrossBridge, we don’t just “help with EDI.”

We handle the entire setup—communicating directly with SPS Commerce or any other EDI provider, managing testing, fixing failed ASNs, and making sure your labels pass the scan test the first time.

Behind that, we run a custom-built ERP system already configured for Costco’s requirements. Most of our clients don’t need to build anything from scratch—we just plug them in.

And it doesn’t stop at EDI. We also manage:

• Accounting and tax filing
• ERP setup & management
• Inventory & warehouse operations
• Supply chain & day-to-day logistics

We handle all the backend operations suppliers need to work reliably and compliantly with the biggest retailers—so your leadership can finally focus on the business itself, not get trapped inside the day-to-day grind.

If you want one team that understands Costco’s system—and connects your operations to it without the usual chaos—schedule a strategy call.

We’ll walk you through the fastest, cleanest way to get compliant and stay that way.