SKU Vs. UPC: What is the Difference?

Virginia Miller

June 6, 2024

In this article

SKU is an abbreviation for Stock Keeping Unit, which has a unique alphanumeric code. This code is assigned to each product of a company. With the help of this code, businesses can track the units sold in the inventory. On the other hand, the UPCs are known as Universal Product Codes. It is a 12-digit licensed code provided by the manufacturer from GS1 US.

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The vast difference between these two codes is that the SKU codes are for internal use while the UPCs are for external use. The businesses need to understand the differences between these codes and the SKU vs. UPC for the optimized inventory management system.

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What is a SKU Number?

A SKU number (stock keeping unit) is a unique identifier that businesses assign to products to track them in their inventory system. When you purchase an item from a store, the cashier typically scans the barcode on the product which contains the SKU number. This allows the business to monitor their stock levels and analyze sales data for each product.

What is a UPC Number?

A UPC (Universal Product Code) number is a 12-digit barcode printed on product packaging to identify an item for retail sale. Retailers use UPC numbers to scan products during checkout and track them in their inventory system. UPC numbers also help retailers control pricing and enable defective products to be traced back to the manufacturer.

Difference Between SKU Numbers and UPC Numbers

Code Format

SKU numbers consist of alphanumeric codes with letters and numbers in any format, while UPC barcodes only use 12 numerical digits.

Permanence

Businesses can modify or update SKU numbers as needed to organize their inventory catalog. However, once assigned to a product, the UPC number is permanent and cannot be easily changed.

Usage

SKU numbers are for internal business purposes like inventory tracking and management. UPC numbers enable standardized external tracking as products change hands, ensuring ownership tracking until the customer purchases the product.

Should You Use SKU or UPC Numbers?

If your products change frequently, customizable SKU numbers may suit your needs better. But if you have a large, stable inventory, permanent UPC codes could be preferable. Evaluate your specific business requirements regarding inventory and sales tracking to decide which system fits best.

Examples of SKU and UPC Number Usage

Typical SKU users include e-commerce companies, retail stores, warehouses, fulfillment centers, and service providers. UPC numbers are commonly used by businesses selling products through major retailers like Amazon and Walmart.

Pros and Cons of SKU vs UPC Numbers

SKU Number Advantages

Enable quick product tracking
Reduce shipping errors
Optimize catalog management
Improve inventory analysis and sales forecasting
Potentially lower material costs

SKU Number Disadvantages

Storage space limitations
Difficulty managing excess stock
Expensive to track and ship inventory
Obsolete stock ties up capital
Tax implications of extra inventory

UPC Number Advantages

Quick barcode scanning identification
Display associated retail pricing
Improve checkout speed and efficiency

UPC Number Disadvantages

Require high-quality barcode printing
Lengthy application process

Conclusion

In summary, SKU and UPC numbers serve complementary purposes for product identification and tracking. SKUs enable internal inventory management while UPCs facilitate external retail transactions. Assess your business' specific needs to determine which system better suits your requirements.

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FAQs

Understanding SKU vs UPC: What's the Difference?

SKU and UPC numbers uniquely identify products, but they serve different business purposes. This guide examines how SKUs and UPCs differ and the pros and cons of each system.

What is the difference between a SKU and UPC number?

A SKU (stock keeping unit) number is an internal tracking code used by businesses for inventory management. A UPC (Universal Product Code) barcode is used to scan products at retail checkout. While SKUs use alphanumeric codes, UPCs are 12-digit barcodes.

When should you use SKU numbers?

SKU numbers are ideal for ecommerce companies, warehouses, fulfillment centers and other businesses that need to closely track inventory quantities, sales data and order processing.

When should you use UPC numbers?

UPC barcodes are required for selling products through major retail chains like Amazon, Walmart or Target. They allow retailers to quickly scan products during checkout.

Can SKU numbers be changed?

Yes, SKU numbers are customizable codes that businesses generate to organize their product catalog. They can be modified as needed when adding, removing or updating inventory items.

Can UPC numbers be changed?

No, UPC numbers are permanently assigned to retail products and cannot easily be altered once created. New codes must be applied for through the manufacturer.

What are the benefits of SKU numbers?

SKUs improve internal inventory tracking accuracy, reduce shipping errors, optimize catalog management, and enhance sales analysis and forecasting.

What are the downsides of UPC numbers?

Potential UPC disadvantages include requiring high-quality barcode printing on all packaging and going through a lengthy application process to acquire new UPC codes.

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