SKU vs UPC vs Barcodes: Top 5 Differences in 2022

Manufacturers face constant pressure to provide important information on their products to be as transparent as possible to customers who have purchased them. It can be cumbersome to fit information such as the manufacturers’ name, manufacturing location and details about the product such as dimensions, category, weight etc onto a product or box that doesn’t have much surface area. Retailers have multiple options to convey this messaging efficiently, without taking up much space. This helps their customers and also themselves because it enables them to identify each individual product or category amongst a sea of other products. This article will explain the differences between SKU vs UPC vs Barcodes and will help you to make a decision in terms of which one would be the best option for your business.

What is a Stock-Keeping Unit (SKU)?

SKU is a name and tracking system merchants use to identify and track their inventory or stock. An SKU – Stock Keeping Unit is a unique code of letters and digits identifying a product’s manufacturer, model, design, colour and measurements.

Companies develop their own SKU identities unique to their products and services. Internal SKUs from two companies selling the same product, such as T-shirts, are likely to differ.

What is a Universal Product Code (UPC)?

UPC is a code imprinted on product packaging to help identify a specific item. It comprises two parts: the machine-readable barcode (a sequence of distinct black bars) and the distinct 12-digit code.

When an item is scanned, UPC makes it easier to recognise the product details such as the trademark, product, dimension and category. In effect, it is logical to use UPCs to allow faster identification and processing of products. UPCs are also helpful for managing stocks within a shop or facility.

What is a Barcode?

A barcode is a relatively basic concept where distinct numerals are assigned to products (every single piece of each item). These digits are then printed on items and packages and scannable through a barcode reader.

Barcodes require three individual components to function:

Master System

It is a database where items are listed, each with assigned codes and a provision for the addition of items due to restocking and reduction through sales is incorporated; this database also compiles the manufacturing, pricing and inventory details.

Barcodes

They are the codes that are printed on every single item.

Barcode Reader

It is a device to read and recognise the code imprinted on the system and translates the details into legible information.

SKU vs UPC vs Barcodes: Top 5 Differences

People generally do not know that there are differences in SKU vs UPC vs barcodes; they are typically used synonymously. But there are specific differences among the 3. Different businesses use these based on the applicability and suitability depending on their product offerings. The differences among SKU vs UPC vs barcodes have been listed below:

SKU vs UPC vs Barcodes: Utilisation Based on Needs

Using identifiers (SKUs or UPCs) greatly depends on business requirements and long-term goals.

When the maximum utilisation of these codes is to be done internally and the business sells products directly to consumers only, there are no B2B selling SKUs that are more optimal compared to UPCs.

Utilising SKUs for small businesses is more sensible, with the only risk being a competitor taking a UPC license before you.

When the business is more of a global entity and many retailers sell your products or you have online stores on popular eCommerce websites, it is more sensible to obtain a UPC which is globally recognised and accepted.

Depending upon the business and its reach of operations, a prudent decision for SKUs or UPCs can be easily taken.

SKU vs UPC vs Barcodes: Best Practices

Best Practices of SKU

• Keep the individual codes short if you want to depict 2-3 key features.
• Choose the most important one and place it at the beginning of the SKU number.
• Most SKUs today are scanned into systems and these machines frequently perceive a zero at the start of a number as empty space. To minimise the confusion created by this sort of issue, make sure that none of your SKU numbers begins with a zero.
• Avoid using letters that may be confused for numerals.
• Do not just repeat the manufacturer’s numbers.
• Avoid letters that might be mistaken for digits.

Best Practices of UPC

• You should only purchase your UPC identifiers from the GS1. GS1 is the only issuer of UPCs, so buying directly from them reduces the chances of fraud, mistakes and legal hassles.
• Do not apply UPCs for items that already have one.
• Proper research and analysis should be done before applying for a UPC.
• You can purchase a prefix capacity plan when a business application for a GS1 prefix has been granted.
• Every option gives you a certain number of UPCs (from ten to One lacs), beginning with the allocated prefix.
• When all the UPCs allotted above are utilised, you will have to purchase fresh UPCs; there is no option to change the plan.
• It is always better to estimate your requirement to avoid any hassles at a later stage of business.

Best Practices of Barcodes

• Determine what you want to barcode and the barcode labels you wish to utilise.
• Determine where you want your barcodes to be placed on your equipment and what information you want your barcodes to include. Choose the kind of scanning gadget that your barcodes will be compatible with.
• In order for the barcode system to achieve long-term success, create inventory indicators such as cycle time, inventory carrying costs, fill rate and order status.
• Improve inventory forecasting by using reports from your barcode inventory system.
• Barcodes must be durable and the system must scan barcodes correctly every time.
• Train your staff on how to use barcodes appropriately.

Conclusion

A fitting inventory management system and an ideally suited product identifier system can take you a long way in properly managing your inventory. Proper management of inventory can help you free up working capital, which can be aptly utilised for more productive purposes. Choose your code system and inventory management system wisely, based on the requirements and financial capabilties of your business. 

If you want to take advantage of seamless inventory management and a prolific order management experience, WareIQ, with its vast array of fulfillment centers and advanced WMS, can definitely help and offers competitive pricing.

SKU vs UPC vs Barcodes: FAQs

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