Product specification: what it is, samples, and electronic specifications for price approval in EDI

Specification is a document that details the terms of a contract: product range, quantity, prices, delivery terms, etc. In business, the most commonly used specifications are delivery contract specifications or product specifications, which are presented in the form of a table listing the items and their prices.

Traditionally, such documents are drawn up in paper form, but this process can be lengthy and inconvenient. Retail chains often change the prices of goods: they introduce promotional offers, make discounts, etc. Each such change requires agreement with the supplier. EDI services use a special tool for price coordination — e-specification (electronic specification).

In this article, we will explain what a specification is and what its main types are, provide examples, and show how electronic specifications in Vchasno.EDI help retail chains and suppliers quickly and efficiently agree on prices.

What is a specification?

A specification is an appendix to a contract that details the terms of cooperation between the parties. It helps to avoid misunderstandings between the parties and clearly record agreements.

The specification may include:

• the list and range of goods;
• the quantity of each item;
• the price per unit;
• the terms and conditions of delivery;
• the technical characteristics of the goods.

In other words, the specification details what exactly and on what terms the supplier transfers to the buyer.

The main types of specifications

📑 Specification to the supply agreement

This is an integral part of the agreement that specifies its terms and conditions. It is used to record agreements between the supplier and the retail chain or other buyers when goods are supplied in batches over a long period of time.

It usually specifies:

• the nomenclature of goods;
• quantity;
• price per unit and total cost;
• delivery schedule;
• details of the parties and signatures.

📦 Product specification

A product specification is a document that describes the characteristics of a product in detail:

• item number or code;
• composition or technical parameters;
• size, color, weight;
• quantity and price.

A product specification is used to ensure that the buyer and supplier have the same understanding of the subject matter of the contract. It helps avoid confusion and ensures accuracy in delivery, especially when it comes to goods with similar names but different characteristics.

🧩 Other types of specifications

• Technical specification — a description of the technical parameters of products or equipment.
• Commercial specification — details payment terms, discounts, commissions, and additional commercial aspects.

Sample specifications

Sample specification to the supply agreement

Contract specifications are usually presented in table form:

The details and signatures of the parties are indicated at the end of the document.

Sample product specification

The product specification may include:

How product specifications help coordinate price changes

At the beginning of the partnership, the retail chain and the supplier sign a supply agreement. It specifies the product range, delivery terms, prices, and other key conditions.

However, if the cooperation is long-term and regular deliveries are expected, it is impossible to predict prices for goods in advance, for example, several months in advance, as the market is changing rapidly.

For prompt detailing and approval of changes, the parties use a separate document — a product specification, which allows them to promptly detail and approve changes. The specification specifies the quantity, prices, and other variable terms of sale for each batch.

Retail chains may need additional price approval in the following cases:

• to agree on promotional prices for goods;
• to reduce prices for certain goods on a permanent basis;
• to agree on the commission percentage that the chain receives from the supplier for the sale of its goods;
• to agree on both a price reduction and a commission percentage at the same time.

Approving price changes in paper format

When using paper documents, any changes in prices (e.g., price reductions or approval of promotions) are formalized in additional agreements. Approving prices using paper documents is a complex and lengthy process that takes a lot of time. Documents go through several stages of approval at the level of managers and department heads, and the final signature is provided by the commercial director. Because of this, approval is often delayed by a week or more.

Electronic product specification in EDI

Modern EDI services offer a convenient alternative to paper documents — electronic specifications (e-specifications). They allow suppliers and retail chains to quickly agree on changes in prices and terms of cooperation without wasting time.

During negotiations on price changes, partners exchange EDI documents (e-specifications) online. The agreement consists of the following stages:

1. The chain forms a list of goods with prices — an electronic specification (PRODUCTLIST). This is the starting point for further agreement.
2. If prices change for a promotional period or on a permanent basis, the supplier generates a price change request — a product agreement (AGREEM) — and sends it to the retail chain.
3. If the retail chain confirms the price change request, it generates a final legally binding document — a product specification (COMDOC_008).
4. The partners sign the document with a qualified electronic signature (QES), completing the e-specification procedure.

Thanks to e-specification in EDI, the price agreement process becomes fast and transparent. Everything happens online through a web account, without delays or paperwork.

🏪 Benefits for retail chains

Since chains are the ones who usually start promotions and discounts, they get the most out of e-specifications. Here are some of the key benefits for them:

• Time savings. The process of agreeing on prices and signing documents is cut down from weeks to a few hours or even minutes.
• Work efficiency. Managers do not waste time on paperwork and can focus on more important tasks.
• Planning promotional prices. You can upload a list of products for several upcoming promotions at once, and the supplier will agree on prices for each of them in a single document.
• Timely launch of promotions. Marketing activities start on the right dates. Thanks to quick price approval, retail chains always launch planned promotions on time. This is especially important when they are tied to specific dates, such as holidays or company anniversaries.

🚚 Benefits for suppliers

Suppliers also benefit from e-specifications. According to Vchasno.EDI statistics, one of the most common reasons for penalties from chains is violation of specification terms. For example, due to lengthy paper approvals, a supplier was unable to prepare the required quantity of goods for a promotion and ship them on time. E-specifications help to avoid such situations, meet deadlines, and, as a result, avoid penalties.

How does it work in Vchasno.EDI?

The Vchasno.EDI service offers a simple and convenient procedure for working with e-specifications. Before starting work, the chain and the supplier must conclude an agreement that prices for certain groups of goods will be agreed upon in electronic format.

After that, retail chains can upload specifications directly to the service’s web office, and then the approval process follows the standard EDI scheme.

▶ For more information on how to work with e-specifications in the Vchasno.EDI service, please refer to the help section.

Conclusion

Specifications are an integral part of any contract, allowing for the details of cooperation to be specified. In paper form, they can create difficulties, delaying the approval process. Electronic specifications (e-specifications) in EDI services are an effective tool that speeds up and simplifies price coordination between chains and suppliers.

Using these features in Vchasno.EDI saves retail chains time, optimizes managers’ work, and helps launch promotions on time. For suppliers, it allows them to make timely deliveries and avoid penalties.

Use e-specifications in Vchasno.EDI to make interaction with trading partners as effective as possible.