EDI Cost Analysis

EDI Cost Analysis: VAN Set-Up And Minimum Charges

EDI Cost Analysis regarding VAN services is complicated and difficult to understand at first. The costs depend mainly on the volume of traffic. Some of these charges depend on the terms negotiated with the VAN.

Once upon an EDI time, most companies used a VAN, and there were relatively few VANs. This resulted in very high prices. Today, internet communication has made it very easy for many companies to deal directly with their trading partners.

Declining opportunities and increasing competition has lowered VAN prices, but VAN services still tend to be costly. Following are some attributes associated that may appear on a company’s VAN bill:

  • Set-Up Charge: This is the cost associated with setting up initial services. Usually, there is a one time charge for setting up each mailbox. Sometimes there is a need for more than one mailbox and the chances are that the VAN will charge the setup fee for each additional mailbox. There might also be a monthly charge for each mailbox. For example, there can be a one time $100 charge for the setup of each mailbox and $25 a monthly on-going fee for each mailbox. VANs will also charge extra if data in the mailbox needs to be archived for more than the standard period of time.
  • Minimum Charges: Depending on your negotiated terms, there will typically be a minimum monthly charge whether or not you use the VAN service. This is similar to the minimum billing associated with having a cell phone account. This can range from $25 to over $10000 a month depending on the traffic volume. If the network usage adds up to more than the minimum, the VAN will only bill for the services used.

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