All You Ever Needed to Know About Barcodes and SKUs

 In this video, David explains what barcodes are and how they differ from SKUs

He also describes the differences between UPC and EAN barcodes

If you would prefer to read this article or copy/paste relevant sections, there is a complete transcription below this video

Here is a transcript of the video:

Hi. We're just going to chat for a bit here about barcodes and SKUs, because we often have discussions with new clients about this and it's an issue that seems to bring up all sorts of questions for people. So first of all, a SKU. What do we mean by that? Well S-K-U, a stock keeping unit. It's the absolute lowest entity. It's the most basic unit that you sell. What do we mean by that? Well, it would depend on the kind of things that you're selling. If for example, you're selling clothes, then your SKU would be a particular t-shirt in a particular size and a particular color. In other words, if you have just two t-shirts in your range, you might say you've got two SKUs. You haven't. You've actually got the number of t-shirts, times the number of sizes, times the number of colors.

So you may end up with 64 different SKUs out of those t-shirts. When people ask us why we do all of this, it's sometimes they seem to think that we're just pushing them through all this to make life difficult. But one of the things we're most proud of at my warehouse is our 100% pick-pack guarantee. That means that what goes out the door is exactly what you wanted to go out the door to your clients along with the dispatch note nicely marked up with your logo on it.

The only way we can achieve that is to understand absolutely what's in the warehouse from your supplier that's coming to us. So we scan in every SKU and we scan out every item on an order. In order for us to do that, we have to have barcodes.

Now the difference between a SKU and a barcode, both are unique across your catalog. In other words, the lowest item that let's say a red t-shirt in size medium would have, for example, T red M as a SKU. It's quite a human friendly thing. It's how you might discuss the product with us. It's easy to remember. When you see T red M, T red X, T red XL, you know the sizes that you're talking about. The barcode differs from that in that the barcode is usually not so human friendly. There is a human readable form of a barcode which you see underneath the vertical bars, which would say what the barcode contains. It's usually a string of numbers. It can have other characters in it, but for simplicity, a string of numbers or certainly alphanumeric characters, avoiding special characters.

So that is a unique identifier for the product. It's actually shown of course in barcode format above that, and the reason being that barcode scanners can then read that format. What they're actually doing is looking for line thickness and spaces and then it decodes that into the barcode value.

Now this all sounds highly technical and very complicated, but actually if you're just starting up and you've got your SKUs, you've decided on the SKUs that you want, either we can simply give every SKU a unique barcode and that's automatically done by our systems, or if you prefer you can do it yourself. And it sounds like a big task, but it's not because barcodes are... there are barcode generating tools free and available on the Internet. Some are genuinely free. Some with more fancy features, they cost a few dollars. There is also the ability to create graphics on the fly, so if you enter a barcode value into certain websites, they will actually give you a jpeg or a gif image back that you can print onto a label and stick onto the product.

So all you need to do is to decide on the barcode value. The barcode value, if you're not selling into major chains, it doesn't have to be EAN or totally unique. It just has to be unique within your range. So you could have barcodes of 16, 17, 18, 19 if you wanted to, as long as they are unique within your range. You would then enter your barcode value into the side. You'd be given back a jpeg, you print the label, and you stick it on the product.

Just as a hint, if you are using those, the most common types of barcode are code 39 and code 128. Unless you particularly want to, you don't need to go into all the details of why they're a good idea, but those are... probably one of those two settings would do absolutely fine. You print out your barcodes, you send your products to us, and we can scan them in.

Hopefully that's been of some use. If you wonder why we're making you jump through these hoops and the complexity of barcodes and SKUs, hopefully that's clarified a little bit. Essentially it just helps us do a better job, which means your customers have a better experience and they will come back and buy more and more. So it's great for everybody.