Are you running a manufacturing, ecommerce, or retail business? Then you may have heard about SKUs and UPCs. While these two types of codes have multiple things in common, they are practically different.
We prepared this in-depth guide to help you get a better understanding of SKU vs UPC. Let’s dive into it!
What Is A Stock Keeping Unit (SKU)?
SKUs are product codes generated to be used internally. They are used to identify and track products and manage stock in a warehouse. They are also used across a variety of industries that manage physical products. In addition to facilitating inventory management, Stock Keeping Units can be used to track sales performance and analyze customer buying patterns.
What Is A Universal Product Code (UPC)?
A Universal Product Code is a barcode symbology that is created and printed for labeling a product’s packaging. A UPC is helpful when businesses need to identify and track items in retail operations. It is made up of a machine-readable barcode with 12 numbers made of digits and differs from product to product.
What Are The Benefits of SKUs?
Adapting SKUs into your business’s workflow has multiple benefits:
1. Effective Inventory Management
SKUs are highly effective in inventory management. That’s because they enable businesses to handle stock while having each product assigned to a unique identifier that can be used to track product movements as well as maintain an organized retail store or warehouse. Using SKUs can also prevent a business from inventory errors such as overstocking and understocking.
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2. Customization Capabilities
Due to the fact that SKUs can be customizable, a company may benefit from their use for several reasons. More specifically, it provides flexibility as it can help companies track the inventory and sales of each product variation and help with demand forecasting processes.
3. Optimized Supply Chain Management
SKUs have a vital role when it comes to the supply chain since they can be used to track products throughout the entire supply chain. Stock Keeping Units enable businesses to identify and address bottlenecks or issues found in the supply chain.
What Are the Benefits of UPCs?
1. Efficient Checkout Process
Universal Product Codes enable companies to process transactions more efficiently at the point of sale. The UPC barcode can be scanned quickly, reducing the amount of time required to input product information manually. This way checkout processes are fulfilled more quickly and queues are reduced.
2. Enhanced Data Analysis
UPCs enable businesses to collect and analyze data on product sales and customer buying processes. Businesses usually collect this information before developing a new sales or marketing strategy.
Side By Side Comparison: SKU vs UPC
What are the differences between SKUs vs UPCs? A Stock Keeping Unit is typically an alphanumeric code that contains letters and numbers while Universal Product Codes are numeric codes that consist of 12 digits.
Furthermore, SKUs are often customizable by the retailer while UPCs are assigned by the GS1. GS1 is a licensing organization that ensures that each UPC is unique to maintain interoperability among organizations. In addition, SKUs are used primarily for internal inventory management purposes while UPCs are used to scan and identify products at the point of sale. Stock Keeping Units include more detailed information about an item such as its color, size, etc. while UPCs provide limited information about a product’s specifications.
The main difference between SKU vs UPC is that UPC is universal. This means that UPCs are recognized by every companies in contrast with SKUs. Furthermore, SKUs can be accompanied by a barcode while UPC is printed as a barcode. Lastly, SKUs can be used for products and services whereas UPCs can be only used for products.
Best Practices for SKU Codes
- Use a combination of letters and numbers
- Start codes with a letter of better readability
- Do not use letters that look like numbers
- Start with the most important attributes
- Stay within 8-12 characters
Best Practices for UPC Codes
- Calculate the check digit: The check digit refers to the last digit of the UPC and is calculated based on the first 11 digits of the code.
- Create product codes: The product code contains five digits of the UPC and identifies the specific product.
- Obtain a manufacturer code: This code can be obtained from the GS1 US organization
- Understand the structure of UPCs: UPCs consist of 12-digit codes, including a manufacturer code, a product code, and a check digit.
Here’s a video on how to create a UPC barcode for Amazon FBA:
Using Inventory Management Solution for SKU and UPC
If you’re starting or expanding your business, it’s crucial to keep track of your stock-keeping units and universal product codes. Using an inventory management solution can be an effective way to handle your stock by incorporating SKUs and UPCs into the system while also providing insights into inventory levels and trends.
While spreadsheets may work at first, they are prone to errors such as inaccurate reporting and data loss. However, order management solutions like Megaventory can help control your inventory by allowing you to track inventory movements and connect with ecommerce and accounting software. Properly distinguishing SKUs and UPCs will save you valuable time and resources while helping your business track and identify inventory.
Here’s How To Track Your Inventory with SKUs in Megaventory
When your product information in Megaventory includes a barcode, you can use a barcode scanner every time you are searching for an item. This will work in both making new purchases, and new sales and checking your inventory. Basically whenever you need to find a product, just scan it and watch the magic happen!
For example, here is how you would add items to a new sales order:
Check the box for “Products are added using the Barcode Scanner”. This will simplify the grid and you will be able to easily scan all the items in one go.
Then “Click to add row” and scan the item. Now the product information will be filled out automatically. If you are selling more than one of each item, you can either scan multiple times or just edit the quantity manually. Check out the visual below!
Stamatia Manolara is a Digital Marketer and Content Creator for Megaventory. Her passion is staying up to date with the latest digital marketing technologies as well as upgrading her skills and developing new ones.