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UPC vs SKU Codes: The Complete Guide for Ecommerce Sellers

When managing an ecommerce business, understanding SKU (Stock Keeping Unit) and UPC (Universal Product Code) codes is crucial. While both codes are essential for inventory tracking, they serve different purposes. This guide will help you understand the differences between SKU and UPC codes, their uses, and why you need both for effective inventory management.

What is a Stock Keeping Unit (SKU)?

An SKU is a unique alphanumeric code created by retailers and manufacturers for internal use. It helps in identifying specific products based on various attributes like brand, color, size, and style. For instance, if you sell a purple Zara halter neck dress in size 12, your SKU might look like this: ZA-HN-PUR-12.

SKUs are customized and unique to each business. Different companies selling similar products will have different SKU codes because each business designs its SKU system to fit its inventory needs.

Examples of SKU Use in Retail Stores

Retail stores often use SKU codes alongside UPC codes to manage their inventory more efficiently. For example, a store selling shoes in two colors and two sizes will have four SKUs:

  • Gold, size 39: G39

  • Gold, size 40: G40

  • Brown, size 39: B39

  • Brown, size 40: B40

SKUs allow retailers to track inventory variations easily and manage stock levels accurately.

Warehouses and Product Fulfillment Centers

SKUs are also vital in warehouses and product fulfillment centers. For example, a warehouse storing jackets of different sizes and colors might use SKUs like JAC-10-BL for a size 10 blue jacket. This system helps warehouse staff quickly locate items for shipping, improving efficiency and reducing errors.

What is a Universal Product Code (UPC)?

A UPC is a 12-digit numeric code used universally to identify products. It consists of a machine-readable barcode and a unique number. The UPC code remains the same regardless of who sells the product, making it useful for broad identification and external use.

Structure of a UPC Code
  1. First Six Digits: These are provided by the GS1 US, a non-profit organization that assigns the manufacturer’s identification number.

  2. Next Five Digits: These are assigned by the manufacturer to identify the specific product, including variations like size and color.

  3. Last Digit: This is a check digit used to validate the UPC code during scanning.

Unlike SKUs, which are created by retailers for internal use, UPCs are standardized and must be obtained through GS1 US. UPCs are essential for selling products in retail environments and online marketplaces, as they streamline the identification and pricing processes.

Differences Between SKU and UPC Codes

Understanding the differences between SKU and UPC codes is essential for effective inventory management:

  1. Internal vs. External Use: SKUs are for internal tracking, while UPCs are used universally by all retailers and online marketplaces.

  2. Customization: SKUs are created by individual businesses and can vary in length and format. In contrast, UPCsare standardized 12-digit numeric codes.

  3. Identification: SKUs provide detailed information about a product’s attributes, whereas UPCs identify the product universally.

  4. Format: SKUs can be alphanumeric and vary in length, while UPCs are strictly numeric and fixed at 12 digits.

Why You Need Both SKU and UPC Codes

While both SKU and UPC codes are important, they serve different purposes. Here’s why you need both:

  • Detailed Inventory Management: SKUs provide more detailed information about product attributes, helping with internal tracking and inventory management.

  • Universal Identification: UPCs are necessary for selling products in various retail environments and online marketplaces, ensuring consistent identification and pricing.

  • Efficiency: Using both SKU and UPC codes improves efficiency in inventory management, reduces errors, and streamlines the order fulfillment process.

Tracking SKUs and UPCs

Efficiently tracking SKUs and UPCs can significantly improve your inventory management processes. Here are some methods:

  • Manufacturing Software: Using software that supports multiple tracking codes can automate inventory management, reduce human error, and save time.

  • Spreadsheets: For smaller businesses, spreadsheets can be a starting point, though they are prone to errors and inefficiencies.

  • Inventory Management Systems: Advanced systems provide real-time tracking, reorder point setup, and integration with e-commerce platforms, enhancing accuracy and efficiency.

Benefits of Using SKU and UPC Codes

Using both SKU and UPC codes offers several benefits:

  • Improved Inventory Tracking: SKUs help prevent stock-outs and overstocking by providing detailed product information.

  • Faster Checkouts: UPCs speed up the checkout process in retail environments, improving customer experience.

  • Enhanced Productivity: Automating inventory tracking with SKUs and UPCs reduces manual entry errors and boosts overall productivity.

Practical Applications of SKU and UPC Codes

Implementing SKU and UPC codes in your ecommerce business can streamline various operations, from inventory management to sales analytics. Here are some practical applications:

1. Inventory Management

SKU codes are invaluable for detailed inventory tracking. They allow you to monitor product variations accurately, manage stock levels, and ensure you have the right products available for your customers.

  • Example: A clothing retailer uses SKUs to differentiate between sizes and colors of the same shirt. This enables the retailer to quickly identify which sizes or colors are running low and need reordering.

2. Sales Analytics

SKU codes help businesses analyze sales data at a granular level. By tracking sales performance of specific SKUs, you can identify best-selling items, understand customer preferences, and make informed decisions about product assortments.

  • Example: An ecommerce platform tracks the sales of different SKUs to determine which product variations are most popular, helping them optimize inventory and marketing strategies.

3. Order Fulfillment

UPCs facilitate efficient order fulfillment by ensuring products are correctly identified and processed. This reduces the risk of shipping errors and enhances the overall customer experience.

  • Example: A fulfillment center uses UPC barcodes to scan products during the picking and packing process, ensuring that the correct items are shipped to customers.

Best Practices for Implementing SKU and UPC Codes

To maximize the benefits of SKU and UPC codes, it's essential to implement them correctly. Here are some best practices:

1. Develop a Consistent SKU System

Creating a standardized SKU system is crucial for effective inventory management. Your SKU codes should be logical, consistent, and easy to understand.

  • Tip: Use a structured format that includes key product attributes, such as brand, category, color, and size. For example, a SKU for a blue size 10 jacket could be JAC-BL-10.

2. Regularly Review and Update SKUs

As your product line evolves, ensure that your SKU codes are updated to reflect new additions and discontinued items. Regularly reviewing your SKU system helps maintain accuracy and avoid confusion.

  • Tip: Schedule periodic audits of your SKU inventory to ensure that all products are correctly labeled and that obsolete SKUs are removed.

3. Leverage Technology for Tracking

Investing in inventory management software that supports both SKU and UPC tracking can significantly enhance efficiency. These systems automate many aspects of inventory management, reducing the risk of human error.

  • Tip: Look for software that integrates with your ecommerce platform and provides real-time tracking, automated reorder alerts, and comprehensive reporting.

Common Pitfalls to Avoid

While implementing SKU and UPC codes, businesses often encounter challenges. Here are some common pitfalls and how to avoid them:

1. Overcomplicating SKU Codes

Complex SKU codes can lead to errors and confusion. Keep your SKU codes simple and intuitive to ensure that all team members can easily understand and use them.

  • Tip: Stick to a straightforward coding system that captures essential product attributes without being overly detailed.

2. Ignoring the Importance of UPCs

While SKUs are critical for internal tracking, UPCs are equally important for selling products across various channels. Ensure that all products have both SKU and UPC codes to maximize efficiency and compatibility with external systems.

  • Tip: Work with GS1 US to obtain UPCs for your products, ensuring they meet industry standards.

3. Inconsistent Application

Inconsistent application of SKU and UPC codes can disrupt inventory management processes. Ensure that all team members are trained on the proper use of these codes and follow standardized procedures.

  • Tip: Develop comprehensive guidelines and provide regular training sessions to keep your team informed and consistent in their practices.

The Role of ERP Systems in Managing SKUs and UPCs

Enterprise Resource Planning (ERP) systems can be a game-changer for managing SKUs and UPCs. These systems integrate various business processes, providing a unified platform for inventory management, sales tracking, and order fulfillment.

Benefits of ERP Systems:
  • Real-Time Inventory Tracking: ERP systems provide real-time visibility into inventory levels, helping you manage stock efficiently and avoid stockouts or overstocking.

  • Automated Reorder Points: Set up automated reorder points to ensure timely restocking based on demand patterns.

  • Data Integration: ERP systems integrate with your ecommerce platform, accounting software, and other business tools, ensuring seamless data flow and accurate reporting.

Understanding and implementing SKU and UPC codes are vital for effective ecommerce inventory management. SKUs provide detailed internal tracking, while UPCs ensure universal product identification. By following best practices, avoiding common pitfalls, and leveraging technology like ERP systems, you can streamline your operations, enhance accuracy, and drive business success.

What We Do

Xena Intelligence is an AI-driven platform that leverages AI and data analytics to automate and optimize the performance of brands across eCommerce platforms, maximizing ROI.

XENA Al automatically discovers, analyzes, and completes ecommerce product optimizations faster than humans by harnessing the power of AI and data. It saves both time and costs for e-commerce brands while maximizing ROI.

💡 Discover: XENA seamlessly integrates with ecommerce platforms, unveiling crucial growth opportunities and identifying potential challenges, empowering brands to stay ahead of the curve.

💡 Analyze: Leveraging cutting-edge algorithms and advanced machine learning techniques, XENA analyses millions of data points, pinpointing both opportunities for growth and areas of concern with unparalleled precision.

💡 Optimize: XENA presents a state-of-the-art automation and optimization ecosystem. The cutting-edge AI engine leverages advanced AI algorithms and data intelligence to optimize ecommerce products with precision.

Vist our website to learn more.

Is Product Listing Getting Too Hard? Fret Not.

You can now put AI to work to create listings that convert for your products for FREE

Foresight is a FREE cutting-edge tool that takes the guesswork out of ecommerce product listing optimization. 

Foresight generates listings for your products on Amazon by analyzing market trends and consumer behavior. It provides precise suggestions for optimizing your titles, descriptions, and keywords.

By using Foresight, you can increase your product's visibility and sales potential with data-driven strategies.

Click here to try for FREE. No card required.


When managing an ecommerce business, understanding SKU (Stock Keeping Unit) and UPC (Universal Product Code) codes is crucial. While both codes are essential for inventory tracking, they serve different purposes. This guide will help you understand the differences between SKU and UPC codes, their uses, and why you need both for effective inventory management.

What is a Stock Keeping Unit (SKU)?

An SKU is a unique alphanumeric code created by retailers and manufacturers for internal use. It helps in identifying specific products based on various attributes like brand, color, size, and style. For instance, if you sell a purple Zara halter neck dress in size 12, your SKU might look like this: ZA-HN-PUR-12.

SKUs are customized and unique to each business. Different companies selling similar products will have different SKU codes because each business designs its SKU system to fit its inventory needs.

Examples of SKU Use in Retail Stores

Retail stores often use SKU codes alongside UPC codes to manage their inventory more efficiently. For example, a store selling shoes in two colors and two sizes will have four SKUs:

  • Gold, size 39: G39

  • Gold, size 40: G40

  • Brown, size 39: B39

  • Brown, size 40: B40

SKUs allow retailers to track inventory variations easily and manage stock levels accurately.

Warehouses and Product Fulfillment Centers

SKUs are also vital in warehouses and product fulfillment centers. For example, a warehouse storing jackets of different sizes and colors might use SKUs like JAC-10-BL for a size 10 blue jacket. This system helps warehouse staff quickly locate items for shipping, improving efficiency and reducing errors.

What is a Universal Product Code (UPC)?

A UPC is a 12-digit numeric code used universally to identify products. It consists of a machine-readable barcode and a unique number. The UPC code remains the same regardless of who sells the product, making it useful for broad identification and external use.

Structure of a UPC Code
  1. First Six Digits: These are provided by the GS1 US, a non-profit organization that assigns the manufacturer’s identification number.

  2. Next Five Digits: These are assigned by the manufacturer to identify the specific product, including variations like size and color.

  3. Last Digit: This is a check digit used to validate the UPC code during scanning.

Unlike SKUs, which are created by retailers for internal use, UPCs are standardized and must be obtained through GS1 US. UPCs are essential for selling products in retail environments and online marketplaces, as they streamline the identification and pricing processes.

Differences Between SKU and UPC Codes

Understanding the differences between SKU and UPC codes is essential for effective inventory management:

  1. Internal vs. External Use: SKUs are for internal tracking, while UPCs are used universally by all retailers and online marketplaces.

  2. Customization: SKUs are created by individual businesses and can vary in length and format. In contrast, UPCsare standardized 12-digit numeric codes.

  3. Identification: SKUs provide detailed information about a product’s attributes, whereas UPCs identify the product universally.

  4. Format: SKUs can be alphanumeric and vary in length, while UPCs are strictly numeric and fixed at 12 digits.

Why You Need Both SKU and UPC Codes

While both SKU and UPC codes are important, they serve different purposes. Here’s why you need both:

  • Detailed Inventory Management: SKUs provide more detailed information about product attributes, helping with internal tracking and inventory management.

  • Universal Identification: UPCs are necessary for selling products in various retail environments and online marketplaces, ensuring consistent identification and pricing.

  • Efficiency: Using both SKU and UPC codes improves efficiency in inventory management, reduces errors, and streamlines the order fulfillment process.

Tracking SKUs and UPCs

Efficiently tracking SKUs and UPCs can significantly improve your inventory management processes. Here are some methods:

  • Manufacturing Software: Using software that supports multiple tracking codes can automate inventory management, reduce human error, and save time.

  • Spreadsheets: For smaller businesses, spreadsheets can be a starting point, though they are prone to errors and inefficiencies.

  • Inventory Management Systems: Advanced systems provide real-time tracking, reorder point setup, and integration with e-commerce platforms, enhancing accuracy and efficiency.

Benefits of Using SKU and UPC Codes

Using both SKU and UPC codes offers several benefits:

  • Improved Inventory Tracking: SKUs help prevent stock-outs and overstocking by providing detailed product information.

  • Faster Checkouts: UPCs speed up the checkout process in retail environments, improving customer experience.

  • Enhanced Productivity: Automating inventory tracking with SKUs and UPCs reduces manual entry errors and boosts overall productivity.

Practical Applications of SKU and UPC Codes

Implementing SKU and UPC codes in your ecommerce business can streamline various operations, from inventory management to sales analytics. Here are some practical applications:

1. Inventory Management

SKU codes are invaluable for detailed inventory tracking. They allow you to monitor product variations accurately, manage stock levels, and ensure you have the right products available for your customers.

  • Example: A clothing retailer uses SKUs to differentiate between sizes and colors of the same shirt. This enables the retailer to quickly identify which sizes or colors are running low and need reordering.

2. Sales Analytics

SKU codes help businesses analyze sales data at a granular level. By tracking sales performance of specific SKUs, you can identify best-selling items, understand customer preferences, and make informed decisions about product assortments.

  • Example: An ecommerce platform tracks the sales of different SKUs to determine which product variations are most popular, helping them optimize inventory and marketing strategies.

3. Order Fulfillment

UPCs facilitate efficient order fulfillment by ensuring products are correctly identified and processed. This reduces the risk of shipping errors and enhances the overall customer experience.

  • Example: A fulfillment center uses UPC barcodes to scan products during the picking and packing process, ensuring that the correct items are shipped to customers.

Best Practices for Implementing SKU and UPC Codes

To maximize the benefits of SKU and UPC codes, it's essential to implement them correctly. Here are some best practices:

1. Develop a Consistent SKU System

Creating a standardized SKU system is crucial for effective inventory management. Your SKU codes should be logical, consistent, and easy to understand.

  • Tip: Use a structured format that includes key product attributes, such as brand, category, color, and size. For example, a SKU for a blue size 10 jacket could be JAC-BL-10.

2. Regularly Review and Update SKUs

As your product line evolves, ensure that your SKU codes are updated to reflect new additions and discontinued items. Regularly reviewing your SKU system helps maintain accuracy and avoid confusion.

  • Tip: Schedule periodic audits of your SKU inventory to ensure that all products are correctly labeled and that obsolete SKUs are removed.

3. Leverage Technology for Tracking

Investing in inventory management software that supports both SKU and UPC tracking can significantly enhance efficiency. These systems automate many aspects of inventory management, reducing the risk of human error.

  • Tip: Look for software that integrates with your ecommerce platform and provides real-time tracking, automated reorder alerts, and comprehensive reporting.

Common Pitfalls to Avoid

While implementing SKU and UPC codes, businesses often encounter challenges. Here are some common pitfalls and how to avoid them:

1. Overcomplicating SKU Codes

Complex SKU codes can lead to errors and confusion. Keep your SKU codes simple and intuitive to ensure that all team members can easily understand and use them.

  • Tip: Stick to a straightforward coding system that captures essential product attributes without being overly detailed.

2. Ignoring the Importance of UPCs

While SKUs are critical for internal tracking, UPCs are equally important for selling products across various channels. Ensure that all products have both SKU and UPC codes to maximize efficiency and compatibility with external systems.

  • Tip: Work with GS1 US to obtain UPCs for your products, ensuring they meet industry standards.

3. Inconsistent Application

Inconsistent application of SKU and UPC codes can disrupt inventory management processes. Ensure that all team members are trained on the proper use of these codes and follow standardized procedures.

  • Tip: Develop comprehensive guidelines and provide regular training sessions to keep your team informed and consistent in their practices.

The Role of ERP Systems in Managing SKUs and UPCs

Enterprise Resource Planning (ERP) systems can be a game-changer for managing SKUs and UPCs. These systems integrate various business processes, providing a unified platform for inventory management, sales tracking, and order fulfillment.

Benefits of ERP Systems:
  • Real-Time Inventory Tracking: ERP systems provide real-time visibility into inventory levels, helping you manage stock efficiently and avoid stockouts or overstocking.

  • Automated Reorder Points: Set up automated reorder points to ensure timely restocking based on demand patterns.

  • Data Integration: ERP systems integrate with your ecommerce platform, accounting software, and other business tools, ensuring seamless data flow and accurate reporting.

Understanding and implementing SKU and UPC codes are vital for effective ecommerce inventory management. SKUs provide detailed internal tracking, while UPCs ensure universal product identification. By following best practices, avoiding common pitfalls, and leveraging technology like ERP systems, you can streamline your operations, enhance accuracy, and drive business success.

What We Do

Xena Intelligence is an AI-driven platform that leverages AI and data analytics to automate and optimize the performance of brands across eCommerce platforms, maximizing ROI.

XENA Al automatically discovers, analyzes, and completes ecommerce product optimizations faster than humans by harnessing the power of AI and data. It saves both time and costs for e-commerce brands while maximizing ROI.

💡 Discover: XENA seamlessly integrates with ecommerce platforms, unveiling crucial growth opportunities and identifying potential challenges, empowering brands to stay ahead of the curve.

💡 Analyze: Leveraging cutting-edge algorithms and advanced machine learning techniques, XENA analyses millions of data points, pinpointing both opportunities for growth and areas of concern with unparalleled precision.

💡 Optimize: XENA presents a state-of-the-art automation and optimization ecosystem. The cutting-edge AI engine leverages advanced AI algorithms and data intelligence to optimize ecommerce products with precision.

Vist our website to learn more.

Is Product Listing Getting Too Hard? Fret Not.

You can now put AI to work to create listings that convert for your products for FREE

Foresight is a FREE cutting-edge tool that takes the guesswork out of ecommerce product listing optimization. 

Foresight generates listings for your products on Amazon by analyzing market trends and consumer behavior. It provides precise suggestions for optimizing your titles, descriptions, and keywords.

By using Foresight, you can increase your product's visibility and sales potential with data-driven strategies.

Click here to try for FREE. No card required.


When managing an ecommerce business, understanding SKU (Stock Keeping Unit) and UPC (Universal Product Code) codes is crucial. While both codes are essential for inventory tracking, they serve different purposes. This guide will help you understand the differences between SKU and UPC codes, their uses, and why you need both for effective inventory management.

What is a Stock Keeping Unit (SKU)?

An SKU is a unique alphanumeric code created by retailers and manufacturers for internal use. It helps in identifying specific products based on various attributes like brand, color, size, and style. For instance, if you sell a purple Zara halter neck dress in size 12, your SKU might look like this: ZA-HN-PUR-12.

SKUs are customized and unique to each business. Different companies selling similar products will have different SKU codes because each business designs its SKU system to fit its inventory needs.

Examples of SKU Use in Retail Stores

Retail stores often use SKU codes alongside UPC codes to manage their inventory more efficiently. For example, a store selling shoes in two colors and two sizes will have four SKUs:

  • Gold, size 39: G39

  • Gold, size 40: G40

  • Brown, size 39: B39

  • Brown, size 40: B40

SKUs allow retailers to track inventory variations easily and manage stock levels accurately.

Warehouses and Product Fulfillment Centers

SKUs are also vital in warehouses and product fulfillment centers. For example, a warehouse storing jackets of different sizes and colors might use SKUs like JAC-10-BL for a size 10 blue jacket. This system helps warehouse staff quickly locate items for shipping, improving efficiency and reducing errors.

What is a Universal Product Code (UPC)?

A UPC is a 12-digit numeric code used universally to identify products. It consists of a machine-readable barcode and a unique number. The UPC code remains the same regardless of who sells the product, making it useful for broad identification and external use.

Structure of a UPC Code
  1. First Six Digits: These are provided by the GS1 US, a non-profit organization that assigns the manufacturer’s identification number.

  2. Next Five Digits: These are assigned by the manufacturer to identify the specific product, including variations like size and color.

  3. Last Digit: This is a check digit used to validate the UPC code during scanning.

Unlike SKUs, which are created by retailers for internal use, UPCs are standardized and must be obtained through GS1 US. UPCs are essential for selling products in retail environments and online marketplaces, as they streamline the identification and pricing processes.

Differences Between SKU and UPC Codes

Understanding the differences between SKU and UPC codes is essential for effective inventory management:

  1. Internal vs. External Use: SKUs are for internal tracking, while UPCs are used universally by all retailers and online marketplaces.

  2. Customization: SKUs are created by individual businesses and can vary in length and format. In contrast, UPCsare standardized 12-digit numeric codes.

  3. Identification: SKUs provide detailed information about a product’s attributes, whereas UPCs identify the product universally.

  4. Format: SKUs can be alphanumeric and vary in length, while UPCs are strictly numeric and fixed at 12 digits.

Why You Need Both SKU and UPC Codes

While both SKU and UPC codes are important, they serve different purposes. Here’s why you need both:

  • Detailed Inventory Management: SKUs provide more detailed information about product attributes, helping with internal tracking and inventory management.

  • Universal Identification: UPCs are necessary for selling products in various retail environments and online marketplaces, ensuring consistent identification and pricing.

  • Efficiency: Using both SKU and UPC codes improves efficiency in inventory management, reduces errors, and streamlines the order fulfillment process.

Tracking SKUs and UPCs

Efficiently tracking SKUs and UPCs can significantly improve your inventory management processes. Here are some methods:

  • Manufacturing Software: Using software that supports multiple tracking codes can automate inventory management, reduce human error, and save time.

  • Spreadsheets: For smaller businesses, spreadsheets can be a starting point, though they are prone to errors and inefficiencies.

  • Inventory Management Systems: Advanced systems provide real-time tracking, reorder point setup, and integration with e-commerce platforms, enhancing accuracy and efficiency.

Benefits of Using SKU and UPC Codes

Using both SKU and UPC codes offers several benefits:

  • Improved Inventory Tracking: SKUs help prevent stock-outs and overstocking by providing detailed product information.

  • Faster Checkouts: UPCs speed up the checkout process in retail environments, improving customer experience.

  • Enhanced Productivity: Automating inventory tracking with SKUs and UPCs reduces manual entry errors and boosts overall productivity.

Practical Applications of SKU and UPC Codes

Implementing SKU and UPC codes in your ecommerce business can streamline various operations, from inventory management to sales analytics. Here are some practical applications:

1. Inventory Management

SKU codes are invaluable for detailed inventory tracking. They allow you to monitor product variations accurately, manage stock levels, and ensure you have the right products available for your customers.

  • Example: A clothing retailer uses SKUs to differentiate between sizes and colors of the same shirt. This enables the retailer to quickly identify which sizes or colors are running low and need reordering.

2. Sales Analytics

SKU codes help businesses analyze sales data at a granular level. By tracking sales performance of specific SKUs, you can identify best-selling items, understand customer preferences, and make informed decisions about product assortments.

  • Example: An ecommerce platform tracks the sales of different SKUs to determine which product variations are most popular, helping them optimize inventory and marketing strategies.

3. Order Fulfillment

UPCs facilitate efficient order fulfillment by ensuring products are correctly identified and processed. This reduces the risk of shipping errors and enhances the overall customer experience.

  • Example: A fulfillment center uses UPC barcodes to scan products during the picking and packing process, ensuring that the correct items are shipped to customers.

Best Practices for Implementing SKU and UPC Codes

To maximize the benefits of SKU and UPC codes, it's essential to implement them correctly. Here are some best practices:

1. Develop a Consistent SKU System

Creating a standardized SKU system is crucial for effective inventory management. Your SKU codes should be logical, consistent, and easy to understand.

  • Tip: Use a structured format that includes key product attributes, such as brand, category, color, and size. For example, a SKU for a blue size 10 jacket could be JAC-BL-10.

2. Regularly Review and Update SKUs

As your product line evolves, ensure that your SKU codes are updated to reflect new additions and discontinued items. Regularly reviewing your SKU system helps maintain accuracy and avoid confusion.

  • Tip: Schedule periodic audits of your SKU inventory to ensure that all products are correctly labeled and that obsolete SKUs are removed.

3. Leverage Technology for Tracking

Investing in inventory management software that supports both SKU and UPC tracking can significantly enhance efficiency. These systems automate many aspects of inventory management, reducing the risk of human error.

  • Tip: Look for software that integrates with your ecommerce platform and provides real-time tracking, automated reorder alerts, and comprehensive reporting.

Common Pitfalls to Avoid

While implementing SKU and UPC codes, businesses often encounter challenges. Here are some common pitfalls and how to avoid them:

1. Overcomplicating SKU Codes

Complex SKU codes can lead to errors and confusion. Keep your SKU codes simple and intuitive to ensure that all team members can easily understand and use them.

  • Tip: Stick to a straightforward coding system that captures essential product attributes without being overly detailed.

2. Ignoring the Importance of UPCs

While SKUs are critical for internal tracking, UPCs are equally important for selling products across various channels. Ensure that all products have both SKU and UPC codes to maximize efficiency and compatibility with external systems.

  • Tip: Work with GS1 US to obtain UPCs for your products, ensuring they meet industry standards.

3. Inconsistent Application

Inconsistent application of SKU and UPC codes can disrupt inventory management processes. Ensure that all team members are trained on the proper use of these codes and follow standardized procedures.

  • Tip: Develop comprehensive guidelines and provide regular training sessions to keep your team informed and consistent in their practices.

The Role of ERP Systems in Managing SKUs and UPCs

Enterprise Resource Planning (ERP) systems can be a game-changer for managing SKUs and UPCs. These systems integrate various business processes, providing a unified platform for inventory management, sales tracking, and order fulfillment.

Benefits of ERP Systems:
  • Real-Time Inventory Tracking: ERP systems provide real-time visibility into inventory levels, helping you manage stock efficiently and avoid stockouts or overstocking.

  • Automated Reorder Points: Set up automated reorder points to ensure timely restocking based on demand patterns.

  • Data Integration: ERP systems integrate with your ecommerce platform, accounting software, and other business tools, ensuring seamless data flow and accurate reporting.

Understanding and implementing SKU and UPC codes are vital for effective ecommerce inventory management. SKUs provide detailed internal tracking, while UPCs ensure universal product identification. By following best practices, avoiding common pitfalls, and leveraging technology like ERP systems, you can streamline your operations, enhance accuracy, and drive business success.

What We Do

Xena Intelligence is an AI-driven platform that leverages AI and data analytics to automate and optimize the performance of brands across eCommerce platforms, maximizing ROI.

XENA Al automatically discovers, analyzes, and completes ecommerce product optimizations faster than humans by harnessing the power of AI and data. It saves both time and costs for e-commerce brands while maximizing ROI.

💡 Discover: XENA seamlessly integrates with ecommerce platforms, unveiling crucial growth opportunities and identifying potential challenges, empowering brands to stay ahead of the curve.

💡 Analyze: Leveraging cutting-edge algorithms and advanced machine learning techniques, XENA analyses millions of data points, pinpointing both opportunities for growth and areas of concern with unparalleled precision.

💡 Optimize: XENA presents a state-of-the-art automation and optimization ecosystem. The cutting-edge AI engine leverages advanced AI algorithms and data intelligence to optimize ecommerce products with precision.

Vist our website to learn more.

Is Product Listing Getting Too Hard? Fret Not.

You can now put AI to work to create listings that convert for your products for FREE

Foresight is a FREE cutting-edge tool that takes the guesswork out of ecommerce product listing optimization. 

Foresight generates listings for your products on Amazon by analyzing market trends and consumer behavior. It provides precise suggestions for optimizing your titles, descriptions, and keywords.

By using Foresight, you can increase your product's visibility and sales potential with data-driven strategies.

Click here to try for FREE. No card required.


When managing an ecommerce business, understanding SKU (Stock Keeping Unit) and UPC (Universal Product Code) codes is crucial. While both codes are essential for inventory tracking, they serve different purposes. This guide will help you understand the differences between SKU and UPC codes, their uses, and why you need both for effective inventory management.

What is a Stock Keeping Unit (SKU)?

An SKU is a unique alphanumeric code created by retailers and manufacturers for internal use. It helps in identifying specific products based on various attributes like brand, color, size, and style. For instance, if you sell a purple Zara halter neck dress in size 12, your SKU might look like this: ZA-HN-PUR-12.

SKUs are customized and unique to each business. Different companies selling similar products will have different SKU codes because each business designs its SKU system to fit its inventory needs.

Examples of SKU Use in Retail Stores

Retail stores often use SKU codes alongside UPC codes to manage their inventory more efficiently. For example, a store selling shoes in two colors and two sizes will have four SKUs:

  • Gold, size 39: G39

  • Gold, size 40: G40

  • Brown, size 39: B39

  • Brown, size 40: B40

SKUs allow retailers to track inventory variations easily and manage stock levels accurately.

Warehouses and Product Fulfillment Centers

SKUs are also vital in warehouses and product fulfillment centers. For example, a warehouse storing jackets of different sizes and colors might use SKUs like JAC-10-BL for a size 10 blue jacket. This system helps warehouse staff quickly locate items for shipping, improving efficiency and reducing errors.

What is a Universal Product Code (UPC)?

A UPC is a 12-digit numeric code used universally to identify products. It consists of a machine-readable barcode and a unique number. The UPC code remains the same regardless of who sells the product, making it useful for broad identification and external use.

Structure of a UPC Code
  1. First Six Digits: These are provided by the GS1 US, a non-profit organization that assigns the manufacturer’s identification number.

  2. Next Five Digits: These are assigned by the manufacturer to identify the specific product, including variations like size and color.

  3. Last Digit: This is a check digit used to validate the UPC code during scanning.

Unlike SKUs, which are created by retailers for internal use, UPCs are standardized and must be obtained through GS1 US. UPCs are essential for selling products in retail environments and online marketplaces, as they streamline the identification and pricing processes.

Differences Between SKU and UPC Codes

Understanding the differences between SKU and UPC codes is essential for effective inventory management:

  1. Internal vs. External Use: SKUs are for internal tracking, while UPCs are used universally by all retailers and online marketplaces.

  2. Customization: SKUs are created by individual businesses and can vary in length and format. In contrast, UPCsare standardized 12-digit numeric codes.

  3. Identification: SKUs provide detailed information about a product’s attributes, whereas UPCs identify the product universally.

  4. Format: SKUs can be alphanumeric and vary in length, while UPCs are strictly numeric and fixed at 12 digits.

Why You Need Both SKU and UPC Codes

While both SKU and UPC codes are important, they serve different purposes. Here’s why you need both:

  • Detailed Inventory Management: SKUs provide more detailed information about product attributes, helping with internal tracking and inventory management.

  • Universal Identification: UPCs are necessary for selling products in various retail environments and online marketplaces, ensuring consistent identification and pricing.

  • Efficiency: Using both SKU and UPC codes improves efficiency in inventory management, reduces errors, and streamlines the order fulfillment process.

Tracking SKUs and UPCs

Efficiently tracking SKUs and UPCs can significantly improve your inventory management processes. Here are some methods:

  • Manufacturing Software: Using software that supports multiple tracking codes can automate inventory management, reduce human error, and save time.

  • Spreadsheets: For smaller businesses, spreadsheets can be a starting point, though they are prone to errors and inefficiencies.

  • Inventory Management Systems: Advanced systems provide real-time tracking, reorder point setup, and integration with e-commerce platforms, enhancing accuracy and efficiency.

Benefits of Using SKU and UPC Codes

Using both SKU and UPC codes offers several benefits:

  • Improved Inventory Tracking: SKUs help prevent stock-outs and overstocking by providing detailed product information.

  • Faster Checkouts: UPCs speed up the checkout process in retail environments, improving customer experience.

  • Enhanced Productivity: Automating inventory tracking with SKUs and UPCs reduces manual entry errors and boosts overall productivity.

Practical Applications of SKU and UPC Codes

Implementing SKU and UPC codes in your ecommerce business can streamline various operations, from inventory management to sales analytics. Here are some practical applications:

1. Inventory Management

SKU codes are invaluable for detailed inventory tracking. They allow you to monitor product variations accurately, manage stock levels, and ensure you have the right products available for your customers.

  • Example: A clothing retailer uses SKUs to differentiate between sizes and colors of the same shirt. This enables the retailer to quickly identify which sizes or colors are running low and need reordering.

2. Sales Analytics

SKU codes help businesses analyze sales data at a granular level. By tracking sales performance of specific SKUs, you can identify best-selling items, understand customer preferences, and make informed decisions about product assortments.

  • Example: An ecommerce platform tracks the sales of different SKUs to determine which product variations are most popular, helping them optimize inventory and marketing strategies.

3. Order Fulfillment

UPCs facilitate efficient order fulfillment by ensuring products are correctly identified and processed. This reduces the risk of shipping errors and enhances the overall customer experience.

  • Example: A fulfillment center uses UPC barcodes to scan products during the picking and packing process, ensuring that the correct items are shipped to customers.

Best Practices for Implementing SKU and UPC Codes

To maximize the benefits of SKU and UPC codes, it's essential to implement them correctly. Here are some best practices:

1. Develop a Consistent SKU System

Creating a standardized SKU system is crucial for effective inventory management. Your SKU codes should be logical, consistent, and easy to understand.

  • Tip: Use a structured format that includes key product attributes, such as brand, category, color, and size. For example, a SKU for a blue size 10 jacket could be JAC-BL-10.

2. Regularly Review and Update SKUs

As your product line evolves, ensure that your SKU codes are updated to reflect new additions and discontinued items. Regularly reviewing your SKU system helps maintain accuracy and avoid confusion.

  • Tip: Schedule periodic audits of your SKU inventory to ensure that all products are correctly labeled and that obsolete SKUs are removed.

3. Leverage Technology for Tracking

Investing in inventory management software that supports both SKU and UPC tracking can significantly enhance efficiency. These systems automate many aspects of inventory management, reducing the risk of human error.

  • Tip: Look for software that integrates with your ecommerce platform and provides real-time tracking, automated reorder alerts, and comprehensive reporting.

Common Pitfalls to Avoid

While implementing SKU and UPC codes, businesses often encounter challenges. Here are some common pitfalls and how to avoid them:

1. Overcomplicating SKU Codes

Complex SKU codes can lead to errors and confusion. Keep your SKU codes simple and intuitive to ensure that all team members can easily understand and use them.

  • Tip: Stick to a straightforward coding system that captures essential product attributes without being overly detailed.

2. Ignoring the Importance of UPCs

While SKUs are critical for internal tracking, UPCs are equally important for selling products across various channels. Ensure that all products have both SKU and UPC codes to maximize efficiency and compatibility with external systems.

  • Tip: Work with GS1 US to obtain UPCs for your products, ensuring they meet industry standards.

3. Inconsistent Application

Inconsistent application of SKU and UPC codes can disrupt inventory management processes. Ensure that all team members are trained on the proper use of these codes and follow standardized procedures.

  • Tip: Develop comprehensive guidelines and provide regular training sessions to keep your team informed and consistent in their practices.

The Role of ERP Systems in Managing SKUs and UPCs

Enterprise Resource Planning (ERP) systems can be a game-changer for managing SKUs and UPCs. These systems integrate various business processes, providing a unified platform for inventory management, sales tracking, and order fulfillment.

Benefits of ERP Systems:
  • Real-Time Inventory Tracking: ERP systems provide real-time visibility into inventory levels, helping you manage stock efficiently and avoid stockouts or overstocking.

  • Automated Reorder Points: Set up automated reorder points to ensure timely restocking based on demand patterns.

  • Data Integration: ERP systems integrate with your ecommerce platform, accounting software, and other business tools, ensuring seamless data flow and accurate reporting.

Understanding and implementing SKU and UPC codes are vital for effective ecommerce inventory management. SKUs provide detailed internal tracking, while UPCs ensure universal product identification. By following best practices, avoiding common pitfalls, and leveraging technology like ERP systems, you can streamline your operations, enhance accuracy, and drive business success.

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