Demystifying SKUs and Barcodes: A Comprehensive Guide for E-commerce Sellers

In the world of commerce, we often encounter terms like SKU, and barcode. However, understanding the subtle yet crucial distinctions between these terms can be a challenge. Many people use them interchangeably, adding to the confusion. In this article, we will unravel the mysteries surrounding SKUs, and barcodes, providing clear definitions and explaining their differences and applications.

What is a SKU?

SKU, or Stock Keeping Unit, is an alphanumeric code created and employed internally by retailers and eCommerce businesses. Its primary purpose is to uniquely identify each product and its variations. SKUs can include letters, numbers, and symbols and can be as short or long as needed to distinguish one product from another. These codes often contain detailed product information, such as style numbers, size, color, weight, price, and expiration date. SKUs can be customized to fit a company’s specific tracking needs and can be modified as necessary. You typically don’t need to worry about them matching SKUs from other companies unless you work with third parties like retailers or fulfillment centers. In such cases, adding a barcode, which we’ll discuss shortly, can help differentiate your products.

What is a Barcode?

A barcode is a method for visually representing data in a machine-readable format. Unlike SKUs, barcodes are used externally across the entire retail supply chain, including wholesalers, retailers, and resellers. Traditionally, barcodes represent data through varying the widths and spacings of parallel lines. More recently, alternative patterns like rectangles, dots, and hexagons have been used.

When scanned by a barcode reader, the barcode reveals the encoded data. Barcodes are invaluable for conveying a large amount of information within a small space, and the size of the barcode determines how much data it can store. There are many barcode formats, called symbologies, with one-dimensional (1D) and two-dimensional (2D) barcodes being the primary types.

  • One-dimensional barcodes can further be categorized into:
    • Numeric barcodes: Comprising bars and numbers, this is the most common type. The 12-digit UPC (Universal Product Code) is familiar in North America, while a 13-digit EAN (European Article Number) or IAN (International Article Number) is used elsewhere.
    • Alpha-numeric barcodes: Combining bars, letters, and numbers, these codes can encode more information and find application in grocery stores, libraries, automotive, and defense industries.
  • Two-dimensional barcodes consist of square or rectangular images filled with dots. They do not display visible letters and numbers. Examples include QR codes and Datamatrix barcodes.

Barcodes serve diverse purposes across various industries, including retail, and are continuously evolving with new technologies.

Barcodes in Ecommerce and Retail

In the ecommerce and retail supply chain, one-dimensional numeric barcodes are commonly used. They fulfill two main purposes: product barcodes and shipping barcodes.

  • Product Barcodes: Large brands selling products through multiple channels often register their products with UPCs or EAN/IAN barcodes, depending on manufacturing location. Smaller brands may use different barcodes for internal identification, particularly when working with advanced fulfillment centers.
  • Shipping Barcodes: Shipping carriers have standardized barcode formats used to convey package information, including origin, destination, weight, carrier, and shipping class. These barcodes facilitate package tracking.

Choosing the Right Codes for Your Business

The choice between SKUs, barcodes, and UPCs depends on the size and complexity of your business:

  • SKUs are suitable for smaller businesses, offering internal product tracking.
  • Barcodes can be added as your business grows, simplifying internal inventory management.

Conclusion: In the dynamic world of commerce, understanding the nuances of SKUs, and barcodes is crucial for efficient business operations. These codes, although often used in tandem, serve distinct purposes and can significantly impact your business’s success. Whether you start with SKUs and evolve to barcodes for broader market reach, selecting the right identification system is a critical decision on your path to growth and success.

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