Understanding the distinction between UPC (Universal Product Code) and SKU (Stock Keeping Unit) is crucial for efficient inventory management. Let’s break down what each term means.
UPC is a 12-digit, numerical barcode system used universally and is the same for all identical products, regardless of the retailer.
Manufacturers obtain UPCs through a central authority (GS1 US) so that their products can be identified globally.
- Structure: Always 12 digits, no letters.
- Purpose: To standardize product identification across various stores and platforms.
On the other hand, an SKU is a code devised internally by merchants to track their inventory.
Retailers create their own unique SKUs to correspond with their products, which allows for more customizable and granular tracking.
- Structure: Varies in length, can include both letters and numbers.
- Purpose: To help retailers identify stock and simplify internal operations such as inventory management.
Comparison Table:
| Feature | UPC | SKU |
|---|---|---|
| Length | 12 digits | Varies |
| Content | Numbers only | Letters and numbers |
| Source | Globally standardized | Store-specific |
| Use | All identical items | Unique to each retailer |
Retailers often use both codes — the UPC for broad, universal identification and the SKU for detailed internal management. When products are scanned at checkout or upon arrival at a warehouse, the system uses these codes for tracking and sales data purposes.
Differences Between UPC and SKU
The unique identifiers known as UPC and SKU serve distinct functions within the retail landscape. They differ notably in format, usage, and value to businesses.
Definition and Usage
UPC stands for Universal Product Code, a fixed-length, numerical barcode used universally for tracking trade items in stores. It’s standardized for global consistency and used primarily for sales and checkout processes.
SKU, or Stock Keeping Unit, is an alphanumeric code that merchants use internally to track inventory and manage stock. These codes are not standardized and vary from one business to another, aligning with individual strategies and inventory systems.
Format and Characteristics
UPC:
- Length: 12 digits
- Components: Only numbers, no letters
- Standardization: Globally consistent for widespread recognition
SKU:
- Length: Varies (typically about 8 to 12 characters)
- Components: A mix of letters and numbers
- Standardization: Customized to each company’s inventory system
Advantages in Business
UPC:
- Simplifies the sales transaction process at the point-of-sale.
- Streamlines product identification for buyers and sellers globally.
SKU:
- Enhances inventory tracking and management within a company.
- Offers flexibility in merchandise categorization and sales analysis.
Practical Application in Retail
In retail, both UPC and SKU serve distinct yet vital roles in streamlining operations. Their implementation ensures precise tracking and management across different facets of a retail business.
Inventory Tracking
SKUs or stock keeping units are unique alphanumeric identifiers that retailers generate internally. They allow businesses to track inventory with granularity, including style, size, color, and more, suited to individual product differentiations.
On the other hand, UPCs, or universal product codes, are numeric codes used universally, facilitating the tracking of products across different companies and databases.
Point of Sale Systems
At the point of sale, cashiers use UPCs to scan products, which speeds up the checkout process and updates inventory data in real-time.
Every UPC is specific to a singular product type, avoiding confusion at checkout. Meanwhile, SKUs are customarily used within a retailer’s own system to manage stock levels, reorder information, and analyze sales trends.
Product Identification
UPCs provide a standardized method of product identification that is recognized globally. They ensure that a product sold in one store can easily be identified in another store or online.
Retailers often rely on UPCs for consistency in product identification. Conversely, SKUs enable retailers to customize how they identify their products.
SKUs are useful for internal operations such as sales reporting, product placement, and targeted marketing initiatives.
