SKU vs. UPC: Inventory Labeling Basics

ByDanica Jovic
March 01,2022

You’ll sometimes see the terms SKU and UPC used seemingly interchangeably, but there are important differences, particularly if you run a store or a business that sells products to consumers or other companies. In this guide, we’ll delve deeper into UPC vs. SKU, highlighting the main differences and outlining the use of different types of codes for sales, tracking, and inventory management

What Are SKU and UPC Codes?

SKU and UPC codes are used widely in product sales. The acronyms stand for “stock keeping unit” and “universal product code.” 

What Is an SKU?

An SKU is a scannable, alphanumeric code assigned to a product by a retailer. SKUs usually contain a combination of letters and numbers and are designed solely for internal use. Retailers and companies can come up with their own SKU number system or utilize software to generate SKUs. An SKU number used by different retailers will be different when selling the same product. The UPC will be the same. 

What Is a UPC?

A UPC is a numeric, 12-digit code assigned to products across all retailers and vendors. The UPC is for external use among all retailers. The UPC doesn’t contain letters, it’s always 12 digits long, and it’s printed as a barcode. If two retailers sell the same product, the SKU will be different, and the UPC will be the same. 

The authority responsible for maintaining UPCs is GS1, the international organization that develops and maintains standards for unambiguously identifying entities such as products, documents, logistics units, physical locations, and more. 

UPC vs. SKU Comparison

The key differences between SKUs and UPCs include:

  • Length

The UPC is always 12 digits long. The SKU can be any number of digits. Usually, an SKU is six to 12 digits long. 

  • Composition

The UPC is numeric. The SKU consists of both letters and numbers. 

  • Use

The UPC is used across all retailers. The SKU is designed for internal use only.

  • Consistency

The UPC is consistent across every retailer or business. The SKU is unique to the specific retailer or vendor. UPCs are generated randomly via a universal system.

  • Cost

SKUs are free. There is a charge for obtaining UPCs. 

  • Printing

The UPC is printed as a barcode. The SKU can be printed as a singular code or with a barcode. 

SKU vs. UPC: When To Use Which Code

When To Use SKUs

The most common use for SKUs is to manage stock inventories efficiently. Retailers can use SKUs for inventory management and to track sales and collect and analyze data. SKUs are designed for internal use, and they’re used widely by eCommerce companies and store owners. Uses of SKUs include:

  • Managing and organizing inventories: With SKU numbers, you can manage and organize your inventory in real time and with ease. Every product has an SKU, which can be scanned to bring up relevant information. Retailers can develop a system to create codes based on product categories, sizes, colors, or brands or use software or SKU generators to speed up the process. If you use SKUs, you should find it easier to track products, update your inventory, monitor stock levels, and locate products. 
  • Providing customer assistance: One of the most significant benefits of SKUs for companies that sell products to buyers in-store is enhanced customer assistance. Assistants can now scan codes to locate products, find various sizes or colors, and make recommendations if the product the client wants is out of stock. 
  • Collecting and analyzing sales data: SKUs provide access to useful information about sales, consumer trends, and buying habits. Retailers can utilize SKUs to gauge the demand for various types of products, monitor sales at different times of the year, and spot emerging trends to boost sales. 

When To Use UPCs

UPCs are required for businesses and vendors looking to sell products on external platforms. If you want to sell on Amazon, for example, or you’re interested in pitching to retailers like Walmart, you’ll need to ensure that your items have universal barcodes. UPC stock can still have an SKU - one doesn’t exclude the other. It’s beneficial for retailers to maintain SKU number systems for internal inventory management. 

SKU vs. UPC vs. Serial Number

The serial number is a unique code specific to the individual product. It’s common to use serial numbers to identify issues with electrical appliances and computers. If you report a problem or you need advice, for example, you may be asked to provide the serial number so that the manufacturer can track the item and access information about the owner, the date of purchase, and the warranty status. 

RN Code and EAN Code

Registered identification numbers (RNs) are issued by the Federal Trade Commission to businesses and vendors in the US that manufacture, distribute, or import products governed by the Textile, Wool, and Fur Acts. 

As for European article numbers (EAN) and international article numbers (IAN), they’re used by companies outside of the US. 

UPC and SKU Tracking

UPC and SKU tracking can be done manually, but more and more companies are choosing to take advantage of innovative software, for example, point-of-sale systems. Examples include Shopify, Lightspeed, Square for Retail, and Clover. 

Frequently Asked Questions
Do I need an SKU or a UPC?

Many retailers use both SKUs and UPCs. If you plan to sell products externally - for example, you want to stock items on Amazon - you’ll need a UPC. SKUs are used internally. 

Can I use an SKU as a UPC?

No. SKUs and UPCs are not the same. An SKU is a unique code assigned by the retailer as part of an internal inventory management system. A UPC is a universal code used by all vendors, manufacturers, and distributors. Many retailers will use both SKUs and UPCs, but one can’t replace the other. 

Is an SKU number the same as a barcode?

No, an SKU number is not the same as a barcode. The barcode is basically just a format in which any string of numerals and letters can be represented. UPCs are printed as barcodes, while SKUs can be printed individually or with a barcode to make them machine-readable. 

Does Walmart use SKU or UPC?

Walmart uses both SKUs and UPCs. Walmart SKUs are assigned internally to products sold by Walmart. UPCs are assigned externally. The UPC for products sold by Walmart will be the same as the UPC for products sold by other retailers, but the SKU will be different. If you’re a retailer and you want to sell products by working with large corporations like Walmart, you’ll need to make sure your products have a UPC.

About the author

Danica’s greatest passion is writing. From small businesses, tech, and digital marketing, to academic folklore analysis, movie reviews, and anthropology — she’s done it all. A literature major with a passion for business, software, and fun new gadgets, she has turned her writing craft into a profitable blogging business. When she’s not writing for SmallBizGenius, Danica enjoys hiking, trying to perfect her burger-making skills, and dreaming about vacations in Greece.

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