As Ecommerce continues to get a little more mature, especially private label businesses or smaller companies that are producing their own products, rather than reselling those of other people, we are seeing more and more dedication to things that were always important in traditional retail, like tracking and managing inventory.
Whether you are looking to track and manage your own inventory or you are using a platform like amazon.com, chances are you will have stumbled across the need for a Global Trade Item Number (GTIN) or Universal Product Code, otherwise known as a UPC.
While there are many different kinds of barcodes, UPCs tend to be the most commonly associated with the tracking of individual products, especially if you are using a third-party fulfillment center or you're relying on Amazon FBA service.
Today, we're going to take a deeper dive into what makes these numbers unique, where to get them, how much they cost, and all the other important details you need to know before buying one.
Types Of Product Identifiers
If you look around the world there are quite a few different ways that people have identified products over the years, we're going to focus on three of the most important and most used, to give you a better understanding of each of them and how they might apply in your business.
GTIN Numbers
The first product identifier that we're going to take a look at is what's called a global trade item number or GTIN.
At their core, GTINs are really the backbone of all of the most commonly used types of product identifiers ( Including UPC codes and Ean codes, which we'll discuss below).
Essentially, they are a system of sequential numbers that are used to uniquely identify each and every product registered inside of the Global Standards 1 (or GS1) database.
This database consists of products registered from over 100 countries across the world, and is designed to be a nonprofit organization that develops and helps to maintain standards for business communication around the world.
Any legitimate UPC, Ean, or ISBN code that exists has been issued by the GS1 database, and is technically a GTIN.
If you can remember back to your high school geometry class, there is an apt example for how to remember the difference in these different types of codes, you may remember your teacher saying all squares are rectangles, but not all rectangles are squares.
The same is the case here with something like a UPC or EAN Code, while all UPCs or EANs are technically GTINs, not all GTINS are UPCs or EANs.
UPC Codes
The second unique product identifiers we are going to take a look at are Universal Product Codes or UPC codes, which is actually a little bit like saying ATM machine, since the C in UPC already stands for code :-).
What Are UPC Codes
At its base a UPC code is type of code that is printed on any packaging that is designed to be retail-ready for North America, they are also commonly used by third-party fulfillment centers such as Amazon FBA fulfillment centers in order to understand what a product is, if their proprietary barcodes are missing or aren't scanning for some reason.
They're also commonly used to register a new product in online marketplaces such as amazon.com, to ensure that you are truly listing a unique product.
As part of the bigger GTIN framework, you may also see them referred to as GTIN-12, because they contain 12 digits.
The Anatomy of a UPC
UPC codes can be broken down into four distinct parts.
The Barcode:
If you've ever looked at a product packaging you've probably noticed a barcode on the back, this is designed to be scanned by a barcode scanner and will communicate the numerical information contained within the UPC to whichever computer it's being scanned into.
The Company Prefix:
If you look below the Barcode, you will notice a series of numbers. Depending on the UPC type the first 6-9 (most commonly 6) digits are designed to represent a specific company that is registered within the gs1 database.
The Product Number:
The next set of five numbers will correspond to the unique identifier for the product itself, when combined with the company prefix, you are given the company and the product registered inside of the gs1 database.
The Check Digit:
The last number you will see below the barcode is what is called the check digit. This is a randomly-generated number that is designed to verify that the information from the barcode has been scanned or entered incorrectly.
Advantages of UPC Codes
Generally speaking, there isn't anything super different about a UPC, versus any other barcode type, but as part of the GTIN framework, they do help to identify unique and individual products.
Using a UPC directly on your package not only ensures that they would be ready if you ever decide to sell your product to retailers, but they make your inventory tracking and management of your products substantially easier.
Additionally, if you plan on selling on Marketplace has such as amazon.com you should be using a UPC to register your products inside of those marketplaces, to ensure that no one else can sell the same product under a different listing.
EAN Codes
Outside of North America, you will typically see a 13 digit barcode on products manufactured for places like Europe. This is known as an Ean, European Article Number, or International Article Number.
What Are EAN Codes
Just like with UPC codes, EANs are unique product identifiers that are part of the GTIN database.
They are typically used for products that are manufactured and/or sold outside of North America and typically follow a 13-digit structure, versus the 12-digit structure typically used by UPC codes.
Types of EAN Codes
There are four commonly used types of EANs, that you will see depending on the type of product or size of product that is being barcoded.
EAN-13:
The EAN-13 is the most commonly used form of this type of GTIN and will appear on most retail packaged products.
It is essentially the same as a UPC code, with the exception of the first digit actually being used, to give it to 13 digit structure versus the 12 digits utilized by a UPC (which typically has a leading digit of 0 and is therefore considered to use 12 digits to classify companies and products)
EAN – 8
While most products sold outside of North America use the ean-13 structure to identify products, products like chewing gum, packs of pencils, or even something like cigarettes are often too small to print the folds 13 digits, so they utilize the EAN-8 standard, which only has 8 digits.
EAN – 5 and EAN – 2
No, these aren't for products that are even too small for the EAN-8 type barcodes, you will typically find EAN-5 or EAN – 2 codes alongside a larger barcode, most typically the standard EAN – 13, to give additional information.
For example, you may see one of these codes on the back of a magazine or newspaper to indicate the month or issue number of the publication.
These are also typically used to indicate things like the weight of a bag of produce, or a manufacturer's retail price.
Generally speaking if you are creating your own products this is not something that you are going to be worried about and you should be focused on Ean – 13 standard.
ISBN Codes:
The International Standard Book Number (ISBN), as the name would imply, is the standard bar code that you will find on the back of a book.
Until the end of the year 2006 they were typically 10 digits, but since January of 2007 they are 13 digits.
If you're getting ready to self publish your first novel, you may want to dig a little further into ISBNs, but for any other product you are going to be using another GTIN format.
Where To Buy Your GTIN or UPC
Now that you understand a little bit of the difference between the different types of GTINS, we're going to dive into where you can actually go to get them and get a better understanding of how much it actually costs to properly register your product.
GS1
Since GS1 is the global organization that actually keeps track of all UPC and EAN codes that are created, it often makes the most sense to go directly to the source.
How Much It Costs To Buy A UPC From GS1
The cost of getting set up with GS1 will vary slightly depending on how many barcodes you think you will need.
While in the past, you needed to purchase a package allowing you to create a minimum of 10 barcodes, starting around $250 and a $50 Annual renewal fee, in November of 2020 gs1 announced that they would be allowing small businesses to purchase individual codes directly from them free cost of $30 per code without any renewal fee.
If you have more than one product and want to register your own company prefix, take a look at the pricing chart below to see where you might fall.
Remember, each individual product in your lineup should have its own barcode. So if you sell 10 different kinds of garlic presses, you would want to buy the 10 barcode package.
UPC Code Resellers
In addition to going directly to the source, there are a variety of people that resale codes that they generate themselves from the GS1 Database.
Essentially, they have purchased an unlimited license and generated codes for you, reselling them to you at a slightly lower cost.
The downside is you may not be getting a legitimate code, depending on the seller, or you may not actually be able to use the code within a Marketplace or retail store, since you do not own the company prefix.
If you choose to go through a reseller, my suggestion would be to use somebody like Snap UPC, and avoid sites like ebay.com where you can purchase large numbers of codes for just a few dollars.
How Much It Costs To Buy A UPC From Resellers
As you would expect, price can vary from reseller to reseller, but someone like a snap UPC typically will sell codes for around $5 each.
If this is a short-term project for you, or you're creating something like an eBay listing or Amazon listing to resell a product that doesn't have an existing UPC and it's not going to be part of your brand long-term, then you may want to look at this option.
On the other hand, if this is a serious project for you or a product that is going to be a part of your brand long term, my suggestion would be to go directly to GS1 and get your codes from them, just to ensure you don't run into any issues down the road with online marketplaces or taking the product to retail.
Amazon Specific Requirements
If you're looking to specifically require a UPC to use and list your Amazon product, my suggestion would be to go directly to GS1 to avoid any issues.
They used to require a valid UPC for every new listing created on the site, but I've recently started to allow specific exemptions for things like private label products (see all of the exemptions here).
While this is the case and you may be able to request an exemption if you are trying to list your private label product inside of the Amazon ecosystem, using a UPC is often a better route, because it can help to avoid inventory confusion and make sure that no one else can resell your product on a separate listing on Amazon.
Personally, I would probably just pay the $30 to register my code with gs1 directly to avoid any potential issues down the road, rather than jumping through the Hoops that are required to create an exemption.
Chris Shaffer
Chris lives at the intersection of business strategy and growth tactics. Having consulted with dozens of different businesses (as well as building several of his own), he brings a unique perspective on what's working across the eCommerce world in businesses of all shapes and sizes.
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