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SKU vs UPC: The Codes Behind The Product

In retail and logistics, keeping track of products and managing inventory is essential

  • Written by Ellie Kwon
  • Published on August 3, 2023
  • Time to read 9 minutes

Introduction

In retail and logistics, keeping track of products and managing inventory is essential. Two necessary codes are SKUs (Stock Keeping Units) and UPCs (Universal Product Codes). Although they may seem similar, they have fundamental differences. In this blog, we’ll explore these differences and why they matter to third-party logistics (3PL) providers. Let’s dive in and take a look at the difference between SKU vs UPC.

SKUs: Organizing and Managing Inventory

A SKU (Stock Keeping Unit) is a special code used to keep track of inventory items in a business. It is a code given to a product or item to tell it apart from others. SKUs are usually codes with letters and numbers.

A graphic illustration shows a close up of a handheld RFID scanner scanning a label.

Retailers create SKUs to identify each version of a product. Further, it helps them keep track of what they have.

Retailers, online stores, and businesses of different sizes use SKUs to make managing inventory easier. Each version of a product has its own SKU. For example, if a clothing store sells shirts in different sizes (small, medium, large) and colors (red, blue, green), each combination gets its own SKU. Further, this helps businesses know how much inventory they have, track sales, and reorder products.

Also, SKUs help with pricing, identifying products, and analyzing data. By using SKUs, businesses can work better, track inventory accurately, and make smart product decisions.

SKUs matter because they help organize products by different variations, like size, color, or packaging. 3PL providers use SKUs to manage their inventory, ensure they have enough stock, and know when to order more. An interesting read about the two can be found here. 

Let’s move on and learn more about the difference between SKU vs UPC.

UPCs: Identifying Products Everywhere

A closeup of a handheld RFID scanner is shown, along with a large UPC code.

UPCs are different from SKUs because all retailers use them. They have a barcode and a 12-digit number.

A UPC (Universal Product Code) is a unique barcode retailers use to identify a product. It is a barcode system used in retail. Further, they help with inventory management, sales, and tracking products.

Also, UPCs have black bars and white spaces of different sizes. Further, a barcode reader or scanner scans the barcode and turns the bars and spaces into a number code for the product.

A UPC has two parts: the manufacturer prefix and the item reference number. The manufacturer prefix identifies the product’s maker. The item reference number is unique to each product and is given by the maker. Together, these numbers make a unique code for the product.

UPCs are printed on product packages and are used in retail operations like sales, inventory management, and supply chains. When a product is scanned at the checkout, the UPC is read, and the system gets information like the price and description from a database.

To sum it up, a UPC is a barcode system that finds and tracks products in retail. Thus, it makes it easy to identify products and manage inventory and sales.

Manufacturers or brand owners give products UPCs, and the codes stay the same no matter where the product is sold. UPCs help with identifying products managing inventory, pricing, and sales.

Now you know that maybe it isn’t SKU vs UPC, but how to use SKU and UPC together. For a more thorough dive into their use in warehouse management, look at the article listed here.  

Why SKUs and UPCs Matter to 3PL Providers

  1. a) Managing Inventory: SKUs are important for 3PL providers to manage inventory. Each product version has its SKU, so they can know how much stock they have. This helps them avoid running out of stock and deliver orders on time.

Filling Orders

When 3PL providers get orders, they must pick and ship the right products. That’s where UPCs come in. By scanning the barcode, they can match it with the SKU in their system. This helps them send the correct products and avoid mistakes.

Working with Retailers: 

Many retailers use UPCs to manage their products. To work well with retailers, 3PL providers need to understand UPCs. They can use UPCs to match their inventory and delivery processes with retailers’ systems. This makes working together easier.

Accurate Data and Reports

SKUs and UPCs help generate accurate reports and analyze data. SKUs help track sales, inventory, and when to order more. UPCs provide information about specific products, sales volumes, and performance. Further, sharing this data with clients helps them make better decisions for their business.

Conclusion

Knowing the difference between SKUs and UPCs is essential in retail and logistics. SKUs help manage inventory inside a business, while UPCs help identify products across retailers. For 3PL providers, understanding SKUs and UPCs is essential for managing inventory, filling orders correctly, working well with retailers, and using data effectively. By using SKUs and UPCs correctly, 3PL providers can improve their work and provide better client service.

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