Practical Ecommerce

Inventory Labeling Basics: SKUs, UPCs, EANs

The barcode was first scanned in 1974, on a packet of Juicy Fruit gum. Since then, the technology used in scanning products in the retail marketplace has become commonplace. In today’s ecommerce space, a labeling system is critical. Merchants should implement it as soon as possible.

While many use the terms “SKU” and “UPC” interchangeably, they are actually very different. First off, an SKU (stock keeping unit) is strictly for internal use. A UPC (universal product code) is affixed to a product wherever it is sold in the retail market place. An SKU is the smallest unit of product or service. Since an SKU is unique to a company, a product would have different SKUs if sold by different companies — but they would have the same UPC.

While many use the terms “SKU” and “UPC” interchangeably, they are actually very different.

SKU Basics

Let’s start with SKUs. They are used by companies to account for product in inventory and units of billable entities sold. SKUs help companies to efficiently track the numbers of individual variants of product or services sold. They are not to be confused with the model number of a product, although model numbers and attributes are often included in all or part of an SKU.

An SKU is alpha-numeric and used for internal purposes. Image: Barcoding.com.

An SKU is alphanumeric and used for internal purposes. Image: Barcoding.com.

An SKU should be unique to your company. You can print a label that displays the SKU in the human readable form and also as a barcode for the purposes of scanning.

Do not use a manufacturer’s SKU as yours. If you resell products sourced from a manufacturer, it may change the barcodes or you may source the product from a different manufacturer. If that happens, your SKU is out of sync and must be updated.

SKUs are typically used by warehouses or fulfillment centers, catalogues, ecommerce platforms, and marketplaces. There are many ways to identify your SKU. In my experience, companies often complicate their SKUs and make them too long.

You can certainly include attributes such as color, size, style, date purchased, manufacturer or location purchased, cost, condition, and warehouse location. I suggest eight alphanumeric characters for SKUs. Amazon allows you to include up to 40 characters in an SKU. But keep in mind that Amazon doesn’t receive, put away, or pick from your SKU. Amazon’s assigns an ASIN (Amazon standard identification number), which is a unique set of ten alphanumeric characters.

SKU Dos and Don’ts

Consider what purpose the SKU serves, and the audience. Your decision should be tailored to meet the audience’s needs. Here are some basic do and don’ts.

  • Do keep it for internal use only.
  • Do keep it simple enough to be understood by a fifth grader.
  • Do keep it short, but not so short that it’s confused with a quantity.
  • Do start with letter(s). It’s easier to discern and sort in spreadsheets and sort during receiving, put away, and picking.
  • Do not reuse the SKU for a different product.
  • Do not start with a zero or use characters or symbols that can be confusing or misread by humans or software.
  • Do not use numbers or letters — use both.
  • Do not use a manufacturer’s serial or part number for your SKU. These numbers are often too long and cryptic. Plus, if you switch suppliers or the manufacturer changes the number, it becomes meaningless to your organization.
  • Do not load item numbers with meaning — i.e., do not try to use the item number to describe your product. This will only make your numbers longer, and more complicated. Save this information for the item description.

UPC Basics

You shouldn’t need a UPC unless your product is going to enter the retail space. If, however, you need a UPC, here are some basics.

The UPC code is affixed to a product wherever it is sold, remaining a constant throughout the product’s shelf life. Since an SKU is unique to the company, the same product would have different SKUs if sold by different companies, but they would have the same UPC. UPCs are 12 digits, numeric only.

UPCs must be purchased to ensure that the same two sets of numbers are not issued to more than one company. Many UPC providers sell them online and, for the most part, do so with integrity. But be cautious.

The authority for maintaining standards is GS1 (formerly the Uniform Product Code Council). That organization is the best source to assist meeting any compliance requirements. The EAN (European article number) serves the same purpose as the UPC and has thirteen digits. Check with your retailer to determine if the UPC can be used in the appropriate country or if it must be modified.

In short, remember that SKUs are for internal use. UPCs are for external or universal use.

Michael Manzione

Michael Manzione

Bio   •   RSS Feed


email-news-env

Sign up for our email newsletter

Comments ( 9 )

  1. lola April 26, 2016 Reply

    Hi Michael,

    Great article. thanks for sharing.

    I have a quick question.

    What would be your opinion (pros and cons) about making available to the customers the EAN?

    thanks
    lola

    • Michael Manzione April 26, 2016 Reply

      The EAN (just like a UPC) is a 13 digit code that is unique to a product and is used in all countries except for the US and Canada. I would have no concerns with making the EAN available to my customers.

      • lola April 27, 2016 Reply

        Thanks a lot for you reply Michael!

        Would you particularly see any benefit in having it available? Like to improve SKU visibility in search browser, price comparison websites or some other benefits?

        thanks
        lola

  2. Michael Manzione April 27, 2016 Reply

    Depending on you position your product line in the marketplace and your competitive advantage, I would generally suggest you do. Especially with many apps allowing the consumer to compare products across all platforms.

  3. Jan June 28, 2016 Reply

    Hi Michael, Good information. Question, wondering if I should have the SKU printed on the display box used on the retail shelf for inventory purposes of the purchaser? If so, how do I change the SKU into a readable barcode? Thank you for your help.

  4. Emily October 14, 2016 Reply

    So I own my own little beauty studio. And i just bought some product to retail to my customers. and I am wondering if my SKUS need to be different from my product manufacture/ vendor. and from what i got is the UPC code stays the same as the manufactures right?

  5. Rachel Vogel December 14, 2016 Reply

    Thank you Michael! This was very helpful, I didn’t realize the differences between SKU’s & UPC’s!
    I have a couple of questions, I’m hoping you can enlighten me on..
    Is there a universal SKU font, or where/do I need to buy it?
    Is there a UPC registry of some sort to make sure my UPC is one of a kind, and is recognizable by scanning devices outside my company?
    Thank you in advance!

  6. Howard Harper January 24, 2017 Reply

    I only need maybe 5 UPCs for my business….can i buy them from low cost printers without the UPC fees?

  7. sudhir May 17, 2017 Reply

    May be you guys are not aware of UPSC – world’s toughest examination which is being conducted in 3 parts,Interview is one of the crucial part of it….find q&a from world’s toughest examination’s Interview part..
    https://youtu.be/jm7NMKhSYsM