The Importance of SKUs and Barcodes

The Importance of SKUs and Barcodes 
One of the most important things about distributing a product are SKUs and product-identifying barcodes. These are used when a warehouse is picking an item to fulfill an order to ensure they have the correct product, and also used by distributors sending products to stores and can even be used by the stores themselves and their Point of Sale systems. But what is a SKU and what are the types of barcodes that might be found on products?  


What is a SKU and what should it include? 
“SKU” stands for “stock keeping unit”. It’s a unique alphanumeric code that a business will create for their product that serves to quickly identify the product and keep track of its inventory. Depending on how the SKU is laid out, it may serve different purposes for a business, such as organizing inventory to keep similar products or product types together. It can be used to identify the different variants of a product, such as different sizes of the same clothing item or different colors a product might come in. These SKUs will be used in inventory management software and will usually serve as the key identifying product code. Other warehouses and distributors will also use your products SKUs in their own systems for the same purposes. Because of this, it should be in an easy-to-identify place on the product. Often found on the backside of the product near any barcodes it may have. It can often have a barcode of the SKU itself as well, but generally the barcode will be for product’s UPC or ISBN. There are no rules to exactly how a SKU is made or how many letters or numbers are in the code; you can create your SKU in a manner that works for you.  
Here are some ideas for things you could include in your SKU, should they prove useful to your business: 

- Something that identifies the type of product, if your business makes multiple types. This is usually abbreviated, such as “TS” for t-shirt or “HT” for hat.
- The year your product hit shelves, and in addition to that, perhaps the month or season. This can be useful when holding sales on older product, or when attempting to organize stock by release dates.
- If your product has a separate model number, it can sometimes be embedded, entirely or in part, in the SKU.
- If you have multiple brands under one company’s umbrella, it would be wise to include something identifying the brand.
- If a product has different colors or sizes, be sure to identify that in the SKU.
- If the same identical product may have slight variations of it but still use the same UPC or ISBN, then separate SKUs can be made with something identifying the difference between them. Examples of this might include copies of books that are signed by the author and copies of it that are not, or perhaps a new SKU will be a sticker on a product that has a slight damage and should therefore be sold at a discounted price and would create need to inventory the damaged copies as a separate item.
- Some companies might include something that identifies the manufacturer or supplier, should it useful information for them at a quick glance.
The key part in making SKUs work for your business is to identify all the possible variables early on and then create a system for developing SKUs that remains consistent across all product lines. That way your staff will always know which section of the SKU to look at when they’re trying to find specific information about it, such as what year it came out or which brand it falls under.  

What is a UPC? 
“UPC” stands for “Universal Product Code” is a type of Global Trade Item Number (GTIN) and is a numeric code that identifies a product. A UPC (or “UPC-A”) is a twelve-digit series of numbers that are almost always displayed as a black barcode. It’s used by POS systems to identify a product and its price. It’s also often used to track inventory instead of, or in addition to, the SKU. The second type of UPC is the UPC-E, which is a compressed version that is only eight digits long, intended for small products that need a smaller or shorter barcode. A UPC will be important for every step of the product life chain. It is often used by the manufacturer, warehouse, distributor, and retailer. Books and graphic novels use ISBNs instead of UPCs, but periodical publications, such as single issue comic books and magazines, still use UPCs. In the case of periodicals, one single UPC is used across the entire run of a comic book series or magazine. A second barcode is then added next to the UPC to differentiate between different issues of the periodical, as well as including other identifying information about its release. This smaller barcode consists of five numbers. The first three numbers represent the issue number, meaning this method of barcode can only be applied to periodicals that have 999 issues or less. The fourth number represents the cover. Often comic books and magazines will come out with multiple covers. Sometimes one will be exclusive to stores and another exclusive to mail subscribers, or to a specific retailer, etc. Each cover correlates to a number in this barcode. The fifth number represents the printing. Sometimes a periodical will sell out rapidly and a second printing of the same exact issue will be done, but with the issue identifier code changing to reflect this separate printing. In the example shown here, we can tell by looking at the issue identifier barcode that this is the first issue of this comic book series, with the second cover, and is from the first printing.  

What is an ISBN? 
“ISBN” stands for “International Standard Book Number” and it’s a thirteen-digit long numerical code that identifies books or text-based publications that are not periodicals. ISBNs help the warehouse, distributors, libraries, and booksellers quickly identify a book and the basic information about that book, and which edition of it it may be. This means when a book is re-printed, if there are any changes to the content of that book, such as new edits, new cover art, additional content, a new foreword, etc, that a new ISBN must be assigned. It’s also important that each type of release for the book use a separate ISNB, such as e-book, hardcover, and softcover. This number can also serve the purpose of a SKU or UPC for a warehouse to track inventory and sales.  
For smaller retailers that may not have the ISBN of every book programmed into their Point of Sale systems, many publishers will add a secondary price barcode next to the ISBN barcode for the ease of scanning it to get the MSRP. A price barcode is a five digit number that always begins with the number “5” to immediately identify what type of barcode is being scanned. The following two numbers represent the dollar amount of the MSRP the final two numbers represent the cents (dollar amount after the decimal) of the MSRP. In the example shown the Manufacturer’s Suggested Retail Price is $24.99 USD, therefor the price barcode is 52499. This type of barcode only works for items priced $99.99 or less. 

We here at Whalebacker hope you’ve found this information useful. When in doubt, err on the side of caution and provide a SKU and a UPC or ISBN barcode. Even a product only intended for webstore sales can take off and potentially end up on retail shelves or being warehoused and fulfilled by a company like us. And these identifiers will help make that possible!    
Written by Joshua Werner
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