Bar Code

Retail Barcodes Explained: SKUs, UPC Codes, and How to Get Your Product Ready for Success in Stores

If you want to sell your product in stores, you need to know how retail barcodes work. Whether you’re trying to sell to big stores like Walmart or making your first line of products, you’ll quickly come across terms like SKU, UPC, and barcode.

These words can be hard to understand or even overwhelming for many new business owners. But once you know how they work and how stores use them, you’ll be much more likely to succeed.

We’ll go over everything you need to know about retail barcodes in this guide, including:

What SKUs are and how to make them
What is the difference between SKUs and UPC codes?
How stores use systems to identify products
If you can sell a retailer just one SKU
How to grow your product line in a smart way

Let’s get started with the basics.

What is an SKU in the store?

A business uses an internal code called an SKU, or Stock Keeping Unit, to keep track of its products.

A SKU is, in simple terms,

A unique ID for each item you sell
Used inside your business
Made to help keep track of sales, stock levels, and inventory

For instance, your SKU might look like this if you sell a water bottle:

WB-BLU-24OZ (Blue Water Bottle, 24 ounces)

This code makes it easy to find:

The kind of product
The hue
The size or change

You make SKUs for your own system, not for everyone else.

What is a barcode or UPC code?

UPC codes are universal, but SKUs are only for your own use.

A UPC (Universal Product Code) is:

A barcode that is known all over the world
Retailers use it to scan and find items.
Most big retail chains need it

Most of the time, when people say “barcodes,” they mean UPC codes.

These codes let stores, from small shops to big ones like Amazon, do the following:

Scan items at the register
Keep track of inventory across systems
Take care of logistics and distribution
What is the difference between SKU and UPC?

To be successful in retail, you need to know the difference between SKUs and UPCs.

SKU (Stock Keeping Unit)
For internal use only
Made by your company
You can change the format as you like.
Used to keep track of stock
UPC (barcode)
Use by everyone
Bought or signed up
Standardized style
Used by stores and scanners
Important Point:

Most of the time, you need both.

SKU = for keeping track of things inside your company
UPC = for sales to the public and stores
Why Stores Need Both

Retailers have very organized systems in place. When you sell to a chain store, they need:

A way for them to keep track of your product (UPC)
A way for you to keep track of your stock (SKU)

Your product won’t be ready for sale if it doesn’t have the right barcodes.

This is especially true when dealing with big stores like Target, where everything is automated and follows strict rules.

How to Make an SKU for Your Item

Making an SKU is not hard, but you should think about it carefully.

Best Ways to Make SKUs:
Make it short but full of information.
Include important information about the product, such as its size, color, and type.
Keep the formatting the same
Don’t use special characters that could confuse systems.
Structure of an Example SKU:
Short name for a brand
Type of product
Different colors, sizes, etc.

For example:

TS-BLK-M (T-shirt, black, medium)

You can even use online SKU generators, but a lot of businesses would rather make their own system so they have more control.

Do you need more than one SKU to sell in stores?

This is one of the biggest lies in retail.

You might have heard:

“You can’t sell to a chain store unless you have more than one product.”

That’s not completely true.

The Truth:

You only need one SKU to start a retail business.

Many successful products have come into stores as single items, especially if they

Find a solution to a specific issue
Give new ideas
Be different from the rest of the market

Retail buyers are always on the lookout for “the next big thing.” If your product fits that description, having just one SKU might not be a problem.

Why it’s still important to have multiple SKUs

You can start with just one SKU, but for long-term growth, it’s important to add more products.

This is why:

1. Retailers Want to Grow With You

If people like your product, they will want more options from your brand.

2. More Presence on the Shelf

More SKUs means more store visibility.

3. More money to be made

Every new SKU is a chance to make more sales.

4. Better positioning for your brand

A line of products seems more established than just one item.

If you don’t grow, you might miss out on bigger chances.

Simple Ways to Make More SKUs or Barcodes

The good news? You don’t have to come up with a whole new idea to add to your product line.

You can make new SKUs by changing things about products that are already there.

1. Different Colors

Offer the same item in different colors:

Red
Blue
Green

Every color is a new SKU.

2. Different Sizes

Different sizes are also different SKUs:

Little
Medium
Big
3. Different Features

Add or take away features:

Basic version
The best version
4. Versions Made for Retail

Sometimes, stores only sell certain versions of products.

For instance:

A simpler version for big stores like Walmart
A high-end version for specialty shops

This is a common tactic used by big brands.

Can You Pitch Retailers on Only One Product?

Yes, and you should.

A lot of business owners hold themselves back because they think they need to:

A full line of products
Many SKUs
A huge stock of items

This isn’t right.

You can and should start pitching retailers even if you only have one SKU if you have a good product.

Why?

Because:

Retailers are always on the lookout for new ideas.
Things that are one of a kind stand out.
Timing is important

In fact, “one-hit wonder” products often do very well in stores.

The Retail Market Is Competitive

Retailers today have to deal with a lot of competition, not only from other stores but also from online sites like Amazon.

This gives new brands a chance.

People who want to buy are looking for:

New items
New thoughts
Special deals

They might take a chance on your product if it fills a need, even if it’s your only SKU.

Things You Shouldn’t Do

Many brands make mistakes that they could easily avoid when it comes to retail barcodes and SKUs.

1. Mixing up SKUs and UPCs

They have different uses, so you need both.

2. Making SKU systems too complicated

Make sure your system is easy to use and can grow.

3. Taking Too Long to Grow

Begin with one SKU, but make plans for growth.

4. Not Getting UPC Codes Ahead of Time

Don’t wait; retailers need them.

5. Believing Retail Myths

You don’t need a lot of products to get started.

How SKUs and Barcodes Affect Retail Success

Barcodes are at the center of all the systems that make retail work.

When used correctly, SKUs and UPCs can help you:

Keep track of your inventory well
Control changes in products
Grow your business
Work well with stores

These aren’t just technical details; they’re the building blocks of your retail strategy.

Last Thoughts: Start Small and Then Grow

It doesn’t have to be hard to understand retail barcodes.

Begin with:

One really good product
One clear SKU
One UPC that is registered

After that, build on what you have.

As your product becomes more popular, add more SKUs, improve your systems, and open more stores.

Important Point

You don’t need a lot of different products to do well in retail.

Begin with one SKU, make it great, and then use smart barcode systems to grow.

If you do things right, even one product can lead to big retail opportunities and long-term business growth.

SKU

What Is Bar Code Technology?

Bar codes are an encoding technology using black spaces and white bars to convey information. Readers can access this code with tools like light pens, laser guns or fixed scanners which convert the groups of bars into electronic signals that can be decoded easily.

UPC codes on most products contain a 12-digit barcode consisting of five numbers representing their manufacturer and five for product type identification.

They Encode Information

Short of typing everything out manually, bar codes provide a faster and more accurate means of transferring characters between paper documents and data files. Bar codes reduce misidentification errors significantly compared to typing all characters manually – and in turn save time.

For scanning bar codes, computers linked to scanners identify an exact pattern of black lines of various widths and white spaces that encode information. Next, these scanners translate this data into numerical and alphanumeric representations for easier interpretation.

There are various encoding schemes, or “symbologies,” used to generate bar codes. While some focus on numeric information only, others also encode alphabetic and punctuation symbols as well. Other techniques use stacking or interleaving multiple characters into small spaces – most frequently UPC and EAN codes are the most popular due to their standardized formats that enable their decode by scanners easily.

Example of an EAN-13 Code and UPC-A Code The EAN-13 has 13 digits while UPC-A only contains seven; two narrow, dark bars known as sentinel bars indicate this part of the code should not be misread, while remaining six coding bars consisting of four light and three dark ones alternate in pattern so each digit has two adjacent pairs of wide and narrow bars representing it; any empty space between pairs of bars represents no information, sometimes called non-intelligent spaces.

Other types of bar codes, like Code 128 and Data Matrix, are more complex than their linear equivalents and can be more useful in various applications, including inventory tracking and transportation management. Furthermore, these barcodes store more data than linear symbols due to allowing both letters and numbers (all 128 ASCII characters) as well as start and stop identification, quiet zones, and checksum digits that validate scanned information accuracy.

They Are Easy to Read

Bar codes make it simple and efficient for employees to scan a product and immediately process its information, eliminating the chance for human error and improving accuracy in companies such as medical facilities and retailers that rely on accuracy for success. Utilizing a scanner also speeds up this process significantly when compared with entering product numbers manually.

Early barcodes were simple 1-dimensional designs consisting of basic black lines that could be read by special scanners. But with computer technology and increased demand for accurate product data, bar code development has blossomed exponentially – from Universal Product Code (UPC) used in retail stores to QR codes used on smartphones as links to websites.

Most bar code scanners work by scanning a pattern of narrow and wide lines with spaces on the product label, known as its quiet zone. The scanner then looks for patterns that correspond with each character in the bar code; typically, starting with zero (retail products start here, pharmaceutical products with one, coupons with five), then manufacturer identification followed by check digit verification of accuracy of code contents.

As businesses expand their bar code capabilities, most often beginning with Code 39 is often the go-to choice for non-food labels and is easily read by all bar code scanners. If labels require additional data such as ASCII characters (Code 128) or numerical/lowercase information such as Uniform Code Group 3 (UCG 3), other encoding formats could be employed; examples being Code 128 which supports all ASCII characters while UCG3 formats offer greater versatility in storage options for numeric/lowercase data storage needs.

Before using bar codes, a company should obtain a GS1 Company Prefix from one of the GS1 Member Organizations to serve as a unique identifier for all barcodes created by that business and ensure all are linked back to one product.

They Are Cost-Effective

Many business owners assume bar code systems are unaffordable and unsustainable, yet bar code technology can save businesses significant sums in both the short and long term. With the decrease in scanner costs and software license fees enabling a small company to implement an affordable barcode system that delivers significant returns over time.

Barcode labels affixed to products enable companies to quickly update inventory and sales information in their enterprise resource planning (ERP) or business management system with each scan of the barcode label, saving time while providing accurate data that delivers real business advantages.

Barcodes not only simplify point-of-sale transactions and reduce errors, they can also help companies track and control inventory in warehouses and retail stores in real time, providing customers with real inventory counts that provide more accurate delivery estimates and enable better defining inventory carrying costs.

Businesses leveraging barcodes can reduce labor costs by eliminating the need for employees to remember product names and numbers by training a scanner to recognize all codes it encounters; cashiers at supermarkets don’t need to memorize all their bestseller’s codes! Barcodes also help lab technicians reduce human errors related to incorrect or illegible handwriting, and quickly reprice samples allowing for rapid repricing.

Barcode systems offer numerous benefits to businesses, including tracking and cataloguing assets, managing employee time and improving document management. Being able to quickly and accurately scan documents makes it easy for law firms, accounting firms and other professionals to manage client files more effectively while government agencies use barcodes as a way to track equipment properly spend public funds received.

Barcode systems have almost endless uses; all it takes to choose an effective barcode solution is to identify your most pressing business requirements and select one accordingly. For example, pharmaceutical manufacturers could utilize barcodes to record expiration dates of medications as well as track patient prescription histories.

They Are Discrete

Discrete bar codes consist of individual characters that can be decoded individually. They use narrow lines and spaces to represent numbers or letters. Furthermore, discreet bar codes must include quiet zones at either end of every symbol to allow scanners to read it without interference from nearby symbols.

Most commonly, numeric bar codes – UPC, EAN, Interleaved 2 of 5, and GS1 DataBar) are utilized. These one-dimensional barcodes are known as 1-dimensional barcodes; however, 2-dimensional barcodes such as QR codes, Data Matrix codes and MaxiCode are becoming increasingly popular due to their ability to encode more data within smaller spaces, cutting costs on labels and printing costs significantly.

There are various bar code symbologies. Code 39 and Interleaved 2of5 are discrete variable length barcodes that encode two to four numeric digits; these codes are often found in retail stores to automate point-of-sale scanning, printed onto corrugated cardboard for printing purposes. On the other hand, others like GS1 DataBar and Code 128 offer compact flexibility that allows warehouse management, inventory tracking and other industrial applications.

Other bar code symbologies are modular, featuring bars and spaces of two distinct widths. These binary bar codes use narrow elements fixed multiples of wide element width to encode data while an end stop pattern (usually an asterisk or dash ) marks off their end points.

Codabar – which is utilized by FedEx airbills, photo labs, and U.S. blood banks – is an intuitive self-checking barcode which uses consecutive numbers without the aid of a computer to create its code. Its compact size makes printing on small products effortless while its error detection and correction functionality allow a scanner to easily identify and correct errors.

While both 1-dimensional and 2-dimensional barcodes have their own set of advantages, the key difference lies in how your business software processes data derived from these bar codes – this means the quality of software processing data more than actual bar codes themselves is key to their effectiveness.

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Step-by-step training on how to sell to retail chains!

We explain exactly how to do that and how to get started today. I’ve taught over 100,000 of companies over the years across the globe on how to get your products to the stores. And so we’re here to support you. Or please subscribe to our Youtube channel and or be on the lookout for additional training that we create.

We are here to expedite the process of generating revenue with your physical products and that’s what we’re all about.  Take a look at our advanced training, live events, certification programs and so much more.

In this training, I will discuss some of the things to think about when approaching a retailer to sell your products and become a vendor. Hope it helps! 🙂

Karen Waksman,
Retail MBA

Questions? Contact Us!
1-415-404-9540 (Call or Text)
Email: info@retailmba.com

Retail MBA provides a step-by-step formula on How to Sell to Major Retailers, Online Retailers, Smaller Retailers, Catalogs and More. No Experience Required! These solutions continue to convert for clients year-over-year! These are Time-Tested and Proven Strategies that we utilize ourselves when going after stores! Everything we teach, we test. Want access to these formulas? ANY one of our programs and coaching systems gives you access to them now. With that said… 

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