SKU vs. UPC Codes: What is the difference?

With multiple ways of labeling inventory within the business, it can be arduous to pick a solution that will work perfectly. Between SKU and UPC, there will be different business requirements that you might need to factor in. Looking at them keenly can help know the best solution that will satiate all the business needs.

What is SKU?

Stock Keeping Units (SKUs) are unique sets of letters and numbers that track, locate, and identify materials within a warehouse or company. It’s a great way of managing product catalogs and inventory within the business.

Why use SKUs?

SKU ensures a straightforward approach to the identification of products within the supply chain. In short, SKUs will function as the ID cards for all your products. The classification of the products will depend on:

  • Color
  • Manufacturer
  • Price
  • Size
  • Brand

The classification of these products will rely on the buyers’ requirements, the company’s goals, and the sellers’ priorities. Therefore, if the clients prefer attaining logical information, the SKU should have this information initially. Below are some additional reasons for using SKU.

Better Customer Service

Having an exemplary structure of the SKUs can make it easier for your clients to locate the products that they want. Also, if they ask a query, the service teams can handle them quickly. SKUs make it efficient to recommend products, repeat orders, find products, or even compare product features. 

Besides viewing the different products that the clients want, you can know the stock level. Thus, if the product isn’t available, you can know the different alternatives your customers might consider. However, this might benefit brick-and-mortar stores where service teams are always available to help. 

Sales Forecasting 

SKUs allow a business to track its sales and demand efficiently. It can hence be easier to know the essential decisions that will improve your marketing strategies and sales. Analyzing the revenues and costs of all products using the SKU can allow you to know the products that are performing better. 

Designing the SKU Architecture

Before creating any SKU architecture, you need to understand the data that will be available within the letters and numbers. In return, you can easily know how to create new SKUs for all your products or materials.

You should maintain some relevance to the customer profile, sales priorities, and needs of your company. Here are some steps to follow when designing the architecture.

Unique SKU Numbers

To enhance inventory tracking, you need to create unique SKU numbers and avoid any duplicates. It can also guarantee that your customers can always have the correct information. Reusing old SKUs might cause shipping errors and identification problems.

Catalog Volume and Inventory Management

The architecture you create has to represent your priorities. The details in your SKU will vary depending on the volume of stock that the company deals with. It might be easier to allocate SKUs for all your products if you might have additional stock.

Having an inventory management system will assist with tracking and storing the SKU codes. Therefore, besides working on the architecture, you should simplify the formats by automating these tasks.

The systems you consider can offer a better perspective as to the condition of your warehouse. Since SKU codes will be crucial for your business, you need to find some of the different steps for creating them uniquely.

Know What the Code Says

Before creating the architecture, you need to understand what you would like to access from the SKU codes. Ensure that all the information within the SKU code will be crucial to your business. It can guarantee that you can have some identifiers within all your products.

However, don’t use too much information. Adding more information to the code will utilize more space, which might enhance the chances of errors. For any additional information, consider placing it in the description tag.

Characters and Fonts

When using characters like 0, beware not to confuse it with O. The same case will apply to characters like I and 1. On the other hand, the font will be crucial to ensuring that all your clients will not be confused by the SKU codes.

You should also avoid using symbols when creating the SKU architecture. Some symbols like “/” might be interpreted by your formatting software like dates, leading to formatting errors.

Cascade Method 

Cascading your SKU codes makes it easier to decipher their meaning. The information on these codes will be simple to remember what everything means. Cascading will necessitate you to check the item’s relevance and know which information would best describe it.

After this, you can check the subset pieces of information to find all the ideal models. You will avoid having any questions when trying to decipher the information that is in the SKU code.

Uses of SKU

Besides tracking the inventory and identifying your products, SKU can achieve more. Depending on the collected information, you can attain data to gauge your company’s efficiency and profitability.

Inventory Management

One of the functions of an SKU system is inventory management. The retailers have the capability of tracking the flow of inventory, the turnover, and the levels. Depending on the information they attain, they will set the inventory levels, which will boost their sales.


SKU makes your inventory look unique, thus discerning all the marketing techniques that can bring more sales to your business. Instead of using the manufacturer’s model number, most retailers will prefer SKU since it’s unique. 

In return, it’s harder for a client to find the same products in another store. You can decrease the competitors’ chances of matching prices by using your information. Therefore, you can attract customers who will only buy products instead of making comparisons to buy them online. 


By appropriating SKUs in your business, you will easily collect data to help you know your product’s popularity. The analysis you conduct will help you know about the sales trends and the customer segments that your business can focus on. Attaining this information ensures that your stock inventory can work with the trends of your customers. 

What is UPC? 

Universal Product Codes (UPCs) are global identifiers that allow products to be tracked, reordered, and sold within the supply chain. It entails a GTIN-12 number that holds all the data about the products. For all the products you plan on selling within the business, you need to place unique UPCs. 

Why use UPCs? 

If you’re wondering when you should add UPC to your products, you have to consider the needs of your business. For example, if you would like to sell to major retailers, add UPC to all your products. It makes it easier to identify your products and track their sales. 

When using resellers for your products, UPCs can help know when the orders are purchased, manage the stores’ stock levels, and track the inventory. Therefore, with UPCs, retailers will prefer working with you since you make their work easier. 

What does UPC entail? 

There are two types of UPCs: UPC-A and UPC-E. When using online shops, you might get to use UPC-A since some of them will require 12 digits. The only difference between the two is that UPC-E doesn’t have zeros in the product number. 

Within the UPC, there will be four sections: final digit, product number, company prefix, and country code. You will attain the final digit from the GS1, depending on which numbers are available in the series. 

The product number is crucial since it will differentiate between all the different individual products. The company prefix will be unique to your company since it will exclusively differentiate the company’s products. The country code is usually zero in Canada and the U.S. 

Benefits of UPC Codes 

UPCs can indeed assist with cutting costs and saving time. However, they are better options for increasing the efficiency of companies. Below, we will delve into the advantages of using UPCs within your business. 


Creating UPCs is a simple endeavor. It will not cost the business a fortune, and it will be easy to customize these UPCs. The customization means that you can use the UPCs in tons of products within the business. 

Boost Inventory Control 

When you use UPCs, it’s easier to reduce your inventory levels by boosting your tracking efficiency. Therefore, the business can enjoy lower overheads since it’s easier to know the location of the equipment, materials, or products. 


You can use UPCs for any form of data collection. Since they can be attached to any surface, you can appropriate them to track outgoing shipments, equipment, and products. 

Data Provision 

Scanning the UPCs will be reliable and quick. It can also provide better data since it will entail the inventory number and pricing information. By customizing these codes, you can conceal additional data or information about the different products. 

Differences Between SKU and UPC

By understanding the differences between SKU and UPC, it can be easier for a business to know which identifiers will be the best option. Choosing either option can aid a business in streamlining its inventory management processes and sales. Furthermore, they can be better solutions to protecting against theft, making data accurate, and improving service quality.

Why both SKU and UPC will be good for business 

After knowing the differences between the two, it might be good to know why either can work for a company. Some of the similarities they share make them both good options to consider within the company. 

Accurate Inventory 

By updating inventory, it’s easy to ensure that you have accurate data. Using either UPC or SKU systems can allow you to track all the different entries. Also, this will indicate that no product will be misplaced within the business. 

Employee Productive Time 

Instead of spending lots of time managing inventory, SKU and UPC can be unique labeling options for the inventory system. These systems can track all your products and allow your employees to update the system quickly. Also, the employees can have ample time to assist your clients in finding what they want. 

Knowing What You Have 

Your inventory encompasses most parts of your business. Using either UPC or SKU approaches, it’s easier to track everything and understand the amount of inventory you have in the warehouse. Therefore, you will not be surprised when looking for a product within the warehouse or business. 

Minimize Business Costs 

When purchasing new assets or equipment, you ought to understand where everything is within the business. With UPC and SKU systems, you can update all your records and know which items you need and what you might have available. These systems can make it easier for companies to eliminate any additional inventory.

What is the best option? 

Both SKU and UPCs will have their uses within the business. It’s up to all the labeling needs that you will have in your business. Choose to use SKU or UPC depending on your goals and the option that you believe will be best with product labeling and inventory management. 

The simplest way to know which to use will depend on what you have to identify. For example, when a business plans to identify its internal products and materials, SKU codes might be the best option. This is because they’re simple to use, and they can pack lots of meaningful details. 

Furthermore, SKU codes will be easier to use if you want to use a part of the system to assist with new products. On the other hand, UPCs will be ideal if you’re ready to send your product out to the world. Since these codes are universal, you can represent your brand and products uniquely. 

Both of these systems will have unique advantages to the operations of your business. Your focus should be on choosing a labeling system that will boost the efficiency of your services. A system that will negate all the issues that you might encounter with inventory management

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