SKU, UPC, and Barcodes in the Warehouse

The right barcode system keeps your business on track
The right barcode system keeps your business on track

How you run your warehouse, i.e. your warehouse management, plays a crucial factor for maintaining accurate inventory records, streamlining operations, and delivering products to customers as fast as they come in. While most businesses  have used or at least heard of the SKU (Stock Keeping Unit), UPC (Universal Product Code), and barcodes, many don’t fully understand the differences between them, or the big benefits their use can bring. 

For this post,, we will delve into the differences between SKU, UPC, and some barcode types, explore their individual functions, and cover the potential  implementation process in your warehouse. By understanding and leveraging these systems, your business can optimize inventory management, cut back errors, and improve overall efficiency.

What is a SKU?

SKU, short for Stock Keeping Unit, is a unique alphanumeric code assigned to each unique product in your inventory, which serves as an internal identification system to both categorize items and then track those items. SKUs can be created based on a number of attributes like product category, size, color, or any other unique characteristics. By assigning unique SKUs to your products, you gain better control over your inventory and simplify the management of diverse product offerings.

How to assign SKUs to products:

  1. Evaluate your product categorization needs: Determine the level of granularity required to effectively categorize and manage your products.
  2. Develop a consistent SKU numbering system: Create a logical structure for your SKUs that aligns with your inventory management goals. For example, you can use a combination of letters, numbers, or both.
  3. Assign unique SKUs to each product: Once you have established your SKU numbering system, apply it to every product in your inventory, ensuring that no two products share the same SKU.
  4. Document SKU assignments for reference: Maintain a master SKU database that links each SKU to the relevant product information, such as description, price, and supplier details. This documentation will serve as a valuable resource for your warehouse staff.
Would you rather count by hand, or have all the counts in hand?
Would you rather count by hand, or have all the counts in hand?

What is a UPC?

UPC, which stands for Universal Product Code, is a standardized barcode symbology most commonly used in the retail industry, but first starts as a means to track items in the supply chain. The UPC system provides a globally unique identifier for each product, making it possible to identify and track items across different stores, e-commerce platforms, and warehouses.

To put it simply, a SKU for a product is created by you (the business), while a UPC for a product  is the same for you, me, and everybody.

How to obtain a UPC for your products:

  1. Determine if your products require a UPC: Consider the channels through which you sell your products, such as online marketplaces or brick-and-mortar stores. If your products will be sold in retail environments, a UPC is generally necessary.
  2. Register for a GS1 Company Prefix: GS1 is a global standards organization that assigns unique identification numbers to businesses. Obtain a Company Prefix from GS1, which will serve as the basis for generating your product-specific UPCs.
  3. Generate unique UPCs: Combine your assigned GS1 prefix with product-specific numbers to create unique UPCs for each of your products.
  4. Associate UPCs with corresponding products: In your inventory management system, link each UPC to its corresponding product, including details like SKU, product description, and pricing.

What are (Traditional) Barcodes?

Barcodes are machine-readable (scannable) representations of data that are typically displayed in the form of parallel lines of varying widths and spacing. These visual codes encode information in a format that can be easily scanned by barcode readers or scanners. Barcodes serve as a bridge between physical products and digital data, enabling quick and accurate identification and tracking.

Types of barcodes commonly used:

  1. UPC-A: The most common type of barcode, widely used for product identification and scanning at the point of sale. It consists of 12 numerical digits encoded in parallel lines.
  2. Code 39: This barcode symbology supports alphanumeric characters and is often used for inventory management purposes. It can encode letters, numbers, and a few special characters.
  3. Code 128: A high-density barcode that allows the encoding of large amounts of data. It is commonly used in supply chain operations and can represent both numeric and alphanumeric data.

Visually, these barcodes look nearly identical, but their formats allow for varying amounts of information, BUT… with the increasing amount of data available for products, these traditional barcodes may not be enough for your business.

QR Barcode

What are 2D Barcodes?

Unlike traditional linear barcodes, 2D barcodes are composed of square or rectangular patterns, consisting of various combinations of squares, dots, and other geometric shapes, with the most common examples being QR codes, Maxi Code, and Data Matrix. These 2D barcodes can store significantly more information compared to their linear counterparts and have become increasingly popular due to their versatility and enhanced data capacity.

The adoption of 2D barcodes offers several advantages for warehouse operations, including:

  1. Increased data capacity: 2D barcodes can store much more information than traditional linear barcodes. They can encode alphanumeric characters, website URLs, product descriptions, and even images, providing comprehensive data in a compact format.
  2. Error correction: 2D barcodes often incorporate error correction algorithms, which means that even if a portion of the barcode is damaged or obscured, the data can still be read accurately. This feature improves data integrity and reduces scanning errors.
  3. Faster scanning: Due to their high data density, 2D barcodes can be scanned quickly and accurately, allowing for faster inventory management processes such as stocktaking, order fulfillment, and product tracking.
  4. Enhanced product information: 2D barcodes can link directly to detailed product information, including specifications, instructions, and safety guidelines. This is especially useful for industries that require regulation oversight, such as food and beverage, medicine, health, or even firearms.

Implementing 2D Barcodes in Warehouse Operations

Here’s a quick rundown of how to include 2D scanning and barcodes into your warehouse.

Barcode scanning equipment: Ensure you have barcode scanners capable of reading 2D barcodes. These scanners should be compatible with the chosen 2D barcode symbology.

Staff training: Train your warehouse staff on how to scan and interpret 2D barcodes accurately. Familiarize them with the specific scanning requirements and techniques for different types of 2D barcodes.

Software integration: Integrate your barcode scanning equipment with your inventory management system or warehouse management software. This integration enables seamless data synchronization and real-time inventory updates.

Mobile Warehouse Software: Bring together all the tools above, and maximize your business productivity.

For example:

  • Inventory management: Use 2D barcodes to track and update inventory levels automatically, reducing manual data entry and minimizing errors.
  • Order fulfillment: Scan 2D barcodes to quickly and accurately pick items for orders, improving efficiency and reducing order processing time.
  • Quality control: Attach 2D barcodes to products or packaging to enable easy access to quality control information and ensure compliance with standards.
  • Product traceability: Encode important information such as batch numbers or expiration dates in 2D barcodes to facilitate product traceability and recall processes.
  • Asset tracking: Utilize 2D barcodes to track and manage warehouse equipment, tools, and other assets, improving visibility and reducing loss


SKU, UPC, and Barcodes provide a systematized process to enhance your business productivity in a manner that suits your needs.With a properly implemented barcode process, your warehouse will discover optimized inventory management processes and improve operational efficiency. Additionally, incorporating 2D barcodes into your existing inventory management provides your business more information to leverage to its advantage.

If your business wants to grow and enhance  its warehouse operations, get started here.

Market Trends in Your Warehouse

Is your warehouse ready to work?
Is your warehouse ready to work?

Do you feel you understand your business? Do you understand the demands you face and have a sense of changes that may be on the horizon? Does your business keep pace with the competition? Do you have a grasp of general market conditions?

These types of questions and what-if’s can overwhelm a business, but by keeping a pulse on the market, you can see your business more clearly and plan accordingly.

Let’s cover some recent findings and numbers that can help inform your business, and guide your warehouse.

US-based retailers store $1.43 in inventory per $1 of sales made

(Marketing Alternatives, Inc)

Covid did a number on us, and we’re still working through its economic consequences, with lingering effects showing in inventory-based businesses overstocking their items to meet any sudden surges in customer demand while pre-empting the dreaded stockout.

How does this affect your business?

Overstocking is a complicated factor for businesses, and excessive buying simply ties up cash , leaving capital unavailable for any other uses. Businesses will always need investment, like investing in efficiency or inventory solutions.

Overstocking also carries the potential risk of loss due to product aging and the associated risk of shrink due to product expirations, not to mention the increased costs of controlling and managing additional inventory.

Inventory on-hand has increased by 8.3% over the last five years

(Supply Chain Digest)

Another perspective of the capital tied up in goods is reflected in the total inventory that businesses keep on-hand. Statistics have shown that reducing stock-outs and overstocked items can lower the overall cost of inventory by up to 10%, which represents a significant amount of capital for any company.

How does this affect your business?

We’ve already covered that capital tied up in inventory reduces investment in other areas of the business, but we need to also consider the additional costs lost to extra labor, extra storage, even extra work capacity for those in your warehouse. You only have so much space, and it needs to be utilized wisely.

73% of warehouses plan to use mobile inventory management

(Valu Track)

Mobile Solutions are becoming increasingly important in speeding up warehouse processes while also reducing the errors that are common to managing large volumes of items.

How does this affect your business?

Failing to update your business and its warehouse operations with mobile devices could potentially leave it more susceptible to out-of-stocks and other errors, which would in turn reduce productivity and customer satisfaction.

Total U.S. warehouses is up by 6.8% in the past five years


The world-wide pandemic taught businesses some hard lessons, one of them being the importance of having reliable supply chains, which is now being met by a growing number of “local” suppliers and vendors. We live in a global market, but we also need home-grown solutions.

How does this affect your business?

Your supply chain is the lifeblood of your business, but what if one of your vendors can’t deliver? Or what if your customers rely on your business as part of their supply chain? How can you find greater assurances?

Find other potential vendors while also providing the least amount of friction for your own customers, from better shipping, better communication, even better sales through B2B Sales Portals. Find your exposures, and tighten up.

2D barcodes and a mobile device are simple but effective solutions
2D barcodes and a mobile device are simple but effective solutions

Barcode Technology reduces human error by 43.5% percent 

(National Center for Biotechnology Information)

A recent study conducted on dispensing medicine in conjunction with barcode scanners showed a substantial reduction in human error rates when it comes to order transcription, medication administration, and even potential adverse drug events. 

How can this affect your business?

When it comes to the health of your business, data consistency is key. Too often businesses get away with bad data habits because they’re small enough to make a significant impact. But as business grows, those unchanged habits become big headaches.

Barcode Technology, like 2D barcode scanning and 2D Barcode generation, are small contributors to long-term data and healthy business.

Item-level tagging can increase inventory accuracy to up to 95%

(PR News Wire)

We’re not done with scanning just yet; RFID tags, particularly those used to scan and track inventory and supply chain management, can provide a constant eye on every movement in your operation.

These RFID tags, along with similar sensors and scanners, have the same goals: reduce error, reduce stockouts, and ensure accurate data.

How can this affect your business?

Can your company track its entire supply chain? If not, where does the breakdown occur, and what is it costing you? Isolate those areas, evaluate which can provide the greatest ROI, and systematically work through them.

US retail businesses have an inventory accuracy of just 63%

(PR News Wire)

Imagine holding a business meeting with all the relevant stakeholders to announce that you cannot account for nearly 40% of the inventory at any given time. No one would call that a victory, but thousands of companies operate within this unaccounted reality everyday.

How can this affect your business?

Get inventory control, and then manage it. 

Inventory control pertains to the levels and order points necessary to operate a business, and often include incorporating inventory systems and software.

Inventory management speaks to how you move and handle the inventory for your business processes, and will further involve inventory solutions that can specialize to your businesses specific needs, like the ability to create pallet orders or tie into eCommerce carts.

Stockouts can leave your business in the dark
Stockouts can leave your business in the dark

34% of businesses ship late due to selling out of stock items 


We’ve covered the downfalls of excessive stock, but the flipside brings its own disadvantages. The inability to meet a customer’s expectations creates poor buyer experience and often loss of future sales. 

How can this affect your business?

The goal of an inventory process is to be efficient and automate as much as possible, which is why most inventory software includes features like an auto-reorder point that triggers when stock dips below a set threshold.

But what does that have to do with your business? To illustrate the point that for every inventory issue, for every stock screw-up, there are processes and solutions designed to tackle each one. Those solutions can even begin with a simple consultation to get ahold of the big picture, to then create a plan for moving forward.


Your business may be dealing with many of the common warehouse and inventory problems of other businesses your size, don’t let them stay that way. By keeping an eye on market trends, and comparing those numbers to your own, you will find insight for improvement.

If you’re business needs to improve its inventory, and you want experienced solutions, get started here.