A guide to UPC codes and everything else you need to know about UPCs!
What is a UPC?
Any time you are in a retail store and see a product being "scanned" at the checkout line, you are witnessing a UPC barcode in action. UPC stands for "universal product code." UPC numbers create a standardized way for retailers to identify products quickly (by name, price, stock level, and so on.)
There are several types of barcodes out there but this article will focus on one of the most common barcodes -- the UPC-A barcode (also often referred to as a GTIN-12 code). A UPC-A barcode is used when your product is sold at retail and needs to be scanned at the point of sale (or checkout). Not only does the UPC barcode speed up the check out process and improve accuracy in product information tracking, it also is often required by retailers.
UPC vs. GTIN
We use the terms rather interchangeably although there are slight differences. GTIN stands for "global trade item number" and functions the same way as the standard UPC, which has always been the predominant standard in North America. GTIN's can vary in digit length, but as they relate to the standard 12 digit UPC-A barcodes we mentioned above, you will often see them called "GTIN-12" numbers too.
Do I Need A UPC Code?
You will need to get a UPC barcode if you sell your product through any outlet (brick-and-mortar retailer, online retailer, etc.) that uses UPC codes in their product sales.
If you are intending to sell to retailers that are larger than your local boutique or specialty store, you will most likely need UPC numbers.
Note: If you are selling your product on Amazon, you will need a UPC code number to create the product listing on Amazon (regardless of whether it is FBA or Merchant Fulfilled.) But you don't need to have the physical UPC bar coded sticker.
You do not need a UPC code if you will be selling your product in the following channels:
- Online through your own e-commerce website (ex: Shopify, Squarespace, etc.)
- At small retail stores who don't use scanning POS "Point of Sale" systems (ex: boutiques, mom & pop shops, local specialty stores, etc.)
- In person at arts & crafts shows, flea markets, pop-up shops.
How To Get a UPC Barcode
Step 1: Sign Up For A GS1 Company Prefix
The first thing you need to do is sign up for a GS1 US-Issued Company Prefix by completing their application online. This "prefix" is your own unique identification number that will appear as the first part of your UPC numbers. The number of digits in your GS1 Company Prefix can vary from 6-10 digits depending on your UPC variation needs.
Your company, ABC Clothing, signs up for a GS1 Company Prefix. You choose a 6-digit prefix and get assigned number "042305". Now all of your UPC numbers will start with "042305" in the beginning.
To do this, you must pay to become a GS1 member.
Fees range from $250 all the way up to tens of thousands of dollars, depending on how many unique UPC numbers you will need (which is dependent on how many unique products you will have to sell.) That brings me to step 2.
Step 2: Guestimate Your Barcode and Product Identification Needs
Think about how many products you have now and how many you plan to have in the future. Will these products come in different sizes? Different colors? Will you have different case pack sizes for them? Each of these variations may require a unique identification number.
The biggest mistake we see here is entrepreneurs rushing to get UPC codes before they are 100% done with designing, creating, and finishing their product line.
Generally speaking, each variation requires its own unique UPC (or GTIN) barcode. For example, if you make 3 shirts and each shirt comes in 3 colors, 3 sizes (small, medium, large), and you will sell them in 3 case pack variations (single, 2-pack, 3-pack), you'll need 81 unique numbers (3 shirts x 3 colors x 3 sizes x 3 case packs = 108).
If you anticipate you will have less than 10 products (or product variations):
You can sign up for the entry-level GS1 membership which is a $250 initial fee plus a $50 annual renewal fee.
If you anticipate you will have between 10-100 products (or product variations):
You will sign up for the next plan which is a $750 initial fee plus $150 annual renewal fee.
Step 3: Create Your Own Unique Product Numbers
Like we mentioned above, you'll most likely need a unique UPC number for each product variation you sell. While each of your UPC numbers will begin with the same company prefix (for example: "042305" from Step 1), the remaining characters of your UPC number will be dictated by you.
You can begin your GS1 application to get your own UPC barcodes here.
"I'M STRAPPED FOR CASH, WHAT ARE MY OTHER OPTIONS?"
Though GS1 is the primary way to attain bar codes, there are alternative solutions you can consider. Some Internet-based companies resell UPC codes for less than $100 so that small companies don’t have to pay to join GS1 themselves. Keep in mind that you will be paying for the use of that company’s identification number — not your own. This is an ok solution if you are cash-strapped or working with small retailers and they don’t mind. But purchasing UPCs from these re-sellers will not be acceptable if you plan to sell your product to major retailers as they usually require product makers to have their own identification numbers.
WAIT FOR BUYER FEEDBACK
One of the most common mistakes we see with startups is they purchase UPCs for their entire line before they even gauge interest from buyers. For example, let's say you put together an assortment of 20 items and get samples made. There is no need to purchase UPCs for all 20 items right now! Wait until you set up meetings with multiple buyers. You may realize that buyers are only showing interest in 10 out of your 20 items, and therefore only half of your line will actually go into production . Only purchase UPCs for those 10 items! Had you jumpped the gun and purchased UPCs for the entire assortment, you would have spent double what you needed to.