EDI VAN vs Direct AS2 Connection: Complete Cost & Performance Comparison

Should you use a VAN (Value-Added Network) or connect directly via AS2? Compare costs, speed, technical requirements, and why Walmart, Amazon, and Target mandated AS2 for their suppliers.

Last updated: January 2025 • 12 min read

There are two primary ways to exchange EDI files with retail partners: through a VAN (Value-Added Network) intermediary, or directly using the AS2 protocol. The choice significantly impacts your costs, speed, technical requirements, and compliance with major retailers. In the early 2000s, Walmart became the first major retailer to require AS2, followed by Amazon, Target, and Lowe's - creating a massive industry shift away from VANs.

Quick Comparison: VAN vs AS2

Factor	VAN (Value-Added Network)	Direct AS2
Initial Cost	Lower ($500-$2,000 setup)	Higher ($2,000-$5,000 setup)
Ongoing Cost	Higher (per-transaction + monthly fees)	Lower (uses existing internet)
Speed	Slower (store and forward)	Faster (real-time, direct)
Technical Skill Required	Lower (VAN handles complexity)	Higher (need IT resources)
Setup Time	2-4 weeks	4-8 weeks
Trading Partner Onboarding	Easier (VAN has pre-built connections)	Slower (direct coordination required)
Protocol Support	Multiple (AS2, SFTP, FTP, etc.)	AS2 only
Best For	Small vendors, low volume, limited IT	Medium-large vendors, high volume, in-house IT

What is an EDI VAN (Value-Added Network)?

A VAN is a third-party service provider that acts as a secure intermediary for EDI document exchange. Think of it like a post office: you send your EDI files to the VAN, they store and forward them to your trading partners, and deliver your partners' EDI files to you.

What VANs Provide:

✓Secure network infrastructure for exchanging EDI documents
✓Protocol translation between different EDI formats and connection methods
✓Pre-built trading partner connections with major retailers (Walmart, Target, Amazon, etc.)
✓Store-and-forward service ensuring delivery even if recipient systems are temporarily down
✓Tracking, logging, and reporting of all EDI transmissions
✓Technical support and managed services to help with EDI issues

Major VAN Providers:

SPS Commerce: Largest retail EDI network with 500,000+ trading connections, 105,000+ retailers connected
TrueCommerce: 180,000+ pre-configured trading partner maps for retailers, distributors, 3PLs
OpenText (formerly GXS): Large enterprise VAN with managed service options
IBM Sterling: 800,000+ preconnected trading partners, enterprise focus

Cost Structure: VANs typically charge a monthly base fee ($100-$500) plus per-transaction fees ($0.10-$0.50 per document) or per-kilocharacter fees. For high-volume suppliers, these per-transaction fees add up quickly - often $500-$2,000+ per month.

What is Direct AS2 (Applicability Statement 2)?

AS2 is a protocol for securely exchanging EDI files directly over the internet between trading partners, without a VAN intermediary. It uses encryption, digital certificates, and message integrity checks to ensure secure, reliable transmission.

How AS2 Works:

Both trading partners set up AS2 servers with valid digital certificates
Partners exchange AS2 connection details (URLs, certificate fingerprints, partner IDs)
EDI files are encrypted using the recipient's public key and sent via HTTPS
Recipient decrypts the file and sends back a Message Disposition Notification (MDN) as proof of receipt
Entire process happens in real-time, typically within seconds

AS2 Benefits:

✓Real-time transmission: Files delivered in seconds, not minutes or hours
✓Lower ongoing costs: No per-transaction fees after initial setup
✓Direct control: You manage connections, troubleshooting, and monitoring
✓Secure: Industry-standard encryption and authentication
✓Reliable receipts: MDN acknowledgments confirm delivery

Technical Requirements: AS2 requires in-house IT resources or a managed EDI platform. You'll need an AS2 server (software or cloud-based), digital certificates ($50-$500/year), firewall configuration, and staff who understand AS2 troubleshooting. Not recommended for vendors without dedicated IT resources.

The Walmart AS2 Revolution: Why Major Retailers Mandated Direct Connections

In the early 2000s, Walmart became the first major retailer to require all suppliers to use AS2 instead of relying on VAN intermediaries. This was revolutionary - Walmart had thousands of suppliers using VANs, and the mandate forced a massive industry shift.

Why Did Walmart Require AS2?

Speed: VANs introduced delays (store-and-forward architecture). AS2 enabled near-real-time communication.
Cost reduction: Walmart didn't want to pay VAN fees for receiving EDI files from suppliers.
Direct control: Eliminated the VAN middleman, reducing points of failure.
Scalability: With thousands of suppliers sending hundreds of thousands of EDI files daily, VAN costs and delays were unsustainable.

Retailers That Followed Walmart's Lead:

Amazon: Requires AS2 for Vendor Central suppliers
Target: Supports both VAN and AS2, but prefers AS2
Lowe's: Requires AS2 or VAN (prefers AS2 for large suppliers)
Bed Bath & Beyond: Required AS2 (before bankruptcy)
Microsoft, 3M, Hyundai: Large enterprises adopting AS2 en masse

This created a "domino effect" - once Walmart, Amazon, and other major retailers mandated AS2, their suppliers (often mid-sized manufacturers and distributors) began requiring AS2 from their suppliers as well. Today, AS2 is the standard for high-volume EDI in retail.

Important Note: While Walmart requires AS2, smaller suppliers with limited IT resources can still use a VAN that connects to Walmart via AS2 on their behalf. You don't necessarily need to manage AS2 yourself - but someone in the chain must use AS2 to connect to Walmart.

Real Cost Comparison: VAN vs AS2 Over Time

Let's break down the actual costs for a typical supplier processing 500 EDI documents per month (a mix of inbound 850 POs, outbound 856 ASNs, outbound 810 invoices, inbound 997s).

VAN Costs (Example: SPS Commerce)

Setup fee (one-time):$1,000

Monthly base fee:$300

Per-document fee (500 docs):$150

Year 1 total:$6,400

Year 2+ annual:$5,400

AS2 Direct Costs

Setup (IT time + certificates):$3,000

AS2 software/cloud (monthly):$100

Certificate renewal (annual):$200/yr

Year 1 total:$4,400

Year 2+ annual:$1,400

Break-Even Analysis:

In this example, AS2 costs more upfront ($3,000 vs $1,000 setup), but by Year 2, you've saved $4,000 compared to the VAN. Over 5 years, AS2 saves approximately $18,000.

The higher your transaction volume, the faster AS2 pays for itself. Suppliers processing 1,000+ documents per month can save $10,000-$30,000 annually by switching to AS2.

When to Choose VAN vs AS2

Choose a VAN If:

→You're a small supplier with low EDI volume (<100 documents/month)
→You have no in-house IT resources and need fully managed EDI
→You need to connect to multiple trading partners using different protocols (not just AS2)
→You want fast onboarding with pre-built retailer connections
→You value technical support and hand-holding over cost savings

Choose Direct AS2 If:

→You're a medium-large supplier with high EDI volume (>500 documents/month)
→You have in-house IT resources capable of managing AS2 servers and troubleshooting
→Your major trading partners require AS2 (Walmart, Amazon, etc.)
→You want lower long-term costs and are willing to invest upfront
→You need real-time EDI transmission for operational efficiency

Hybrid Approach (Best of Both Worlds):

Many suppliers use a managed AS2 service - a cloud-based EDI platform that connects via AS2 on your behalf, but with less technical overhead than managing your own AS2 server.

Examples: EDI2XML, Orderful, Cleo Integration Cloud. These offer AS2 connectivity with managed services, typically costing $200-$800/month (flat rate, no per-transaction fees). This is a middle ground between full VAN and self-managed AS2.

Trading Partner Onboarding: VAN vs AS2

VAN Onboarding Process

Sign up with VAN provider
VAN already has connections to major retailers (Walmart, Target, etc.)
VAN maps your internal data format to retailer requirements
Test transactions through VAN's portal
Go live (typically 2-4 weeks)

Advantage: VAN handles all technical coordination with retailers. You only interact with the VAN.

AS2 Direct Onboarding Process

Set up AS2 server and obtain certificates
Contact retailer's EDI team directly
Exchange AS2 connection details (URLs, certificates, IDs)
Configure firewall rules, authentication, encryption
Test transactions directly with retailer
Troubleshoot connection issues (can take multiple rounds)
Go live (typically 4-8 weeks)

Challenge: Onboarding depends on retailer's EDI team responsiveness. Each retailer requires separate setup.

How PlainEDI Helps with Both VAN and AS2

Whether you use a VAN or direct AS2, PlainEDI helps you validate and troubleshoot EDI files before they're sent - catching errors that would otherwise result in rejections or chargebacks.

For VAN Users:

Upload EDI files before sending through your VAN to verify all data is correct. Catch UPC errors, control number mismatches, and missing required fields before your VAN charges you for rejected transactions.

For AS2 Users:

When you receive a 997 rejection or MDN error via AS2, upload the original file to PlainEDI to see exactly what was sent. Compare against trading partner requirements to identify the issue.

Try PlainEDI Free

Upload any EDI file (850, 856, 810, 820, 846, 855, 997) and instantly convert it to readable CSV format. Works with files from VANs or AS2 connections - we support all major retailers.

Convert EDI to CSV →

Frequently Asked Questions

Does Walmart really require AS2, or can I use a VAN?

Walmart requires AS2 connectivity - however, you don't have to manage AS2 yourself. You can use a VAN that connects to Walmart via AS2 on your behalf (most major VANs like SPS Commerce and TrueCommerce do this). From Walmart's perspective, the connection is AS2. From your perspective, you're just uploading files to your VAN.

Can I switch from VAN to AS2 later if my volume grows?

Yes, many suppliers start with a VAN for simplicity, then migrate to direct AS2 once they have the volume to justify the investment and the IT resources to manage it. The transition typically takes 4-8 weeks for testing and certification with each trading partner. Plan the migration carefully to avoid disrupting operations.

How much does AS2 software cost?

Open-source AS2 servers (like OpenAS2) are free but require significant technical expertise. Commercial AS2 software ranges from $50-$300/month for cloud-based solutions (Cleo, Orderful, Aayu) to $5,000-$50,000 for enterprise on-premise solutions (IBM Sterling, OpenText). For most mid-sized suppliers, cloud-based AS2 ($100-$200/month) is the sweet spot.

What happens if my AS2 connection goes down?

Unlike VANs which buffer messages, AS2 is direct - if your AS2 server is down, you can't send or receive EDI files until it's back up. This is why redundancy is critical: use cloud-based AS2 with 99.9% uptime SLAs, set up monitoring and alerts, and have a backup plan (most AS2 platforms support fallback to SFTP or manual transmission during outages).

Do I need separate AS2 connections for each retailer?

Yes. Each trading partner requires a separate AS2 connection with unique URLs, certificates, and partner IDs. This is one reason VANs remain attractive for suppliers working with many retailers - the VAN manages all those connections. With direct AS2, you must set up and maintain each connection individually.