SKUs vs. UPCs: What You Need to Know

Even though most individuals use the terms SKUs and UPCs interchangeably they actually refer to two different things. If you’d like to have an optimised inventory management system, it’s essential that you know the difference between these two terms. 

Here, we’ll cover everything you need to know about SKUs along with UPCs.

What’s the difference between the two?

So, what exactly is the difference between the two?

What does SKU mean? SKU stands for Stock Keeping Unit and is essentially an alphanumeric code that is assigned to a product. SKUs help you to keep track of the number of units that you’ve sold along with the number of units you’ve got in your inventory.

SKUs are unique to each company’s product and are great for product tracking. With SKUs you’ll also be able to identity a product with ease, and they’re typically used internally.

What does UPC mean? UPCs on the otherhand stand for Universal Product Code. It’s a 12-digit code that is licensed by a product manufacutrer from GS1 US – a company that upholds global business and supply chain standards.

UPCs are not generated by the company and are in the form of barcodes. These bar codes allow for faster and more effective tracking and sales of products and are typically used externally.

Benefits and Uses of SKU vs. UPC

What exactly are the benefits of SKUs and UPCs? Here’s a more in-depth comparison between the two.

SKU benefits and uses include:

  • They are easy to create and you can find plenty of SKU generators online that can create custom SKUS for your products.
  • SKUs are useful for managing inventory and calculating inventory data. What this means is that you’ll be able to track your inventory and understand what’s in stock with ease.
  • SKUs are customisable so you’ll be able to use it to distinct and represent various products and services with ease.

SKUs are generally great for internal referencing along with business-specific inventory management.

With UPCs on the otherhand, they’re great for external uses such as tracking a product on the supply chain.

UPC benefits and uses include:

  • Required for most major brands in most product categories such as office products and video games.
  • UPCs are typically included with the items that you purchase so you don’t have worry about generating UPCs.
  • UPCs are typically used in the US whereas businesses outside of the US require a 13-digit serial number.
  • UPCs are randomly generated in the US by a universal system so they remain in the supply chain and are typically easier to track.

The importance of SKUs and UPCs

As seen from the above, SKUs are typically more so for internal use while UPCs are used more so for external use.

Both SKUs and UPCs are however, exceptionally beneficial in their own ways. Not only do they help with tracking, but both of them also allows for more accurate product sales and inventory tracking.

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