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Are You Ready for Barcodes? Everything You Need to Know to Decide (And Where to Buy!)

Now that we’ve talked about common cosmetic labeling mistakes in regards to regulations, let’s dive into some other packaging and labeling areas: bar codes!

The full-time job I quit to start Amathia Soapworks was an inventory management & vendor liaison position in the grocery industry, which gave me a leg up in the world of product-based business from a lot of different angles.

I absolutely adored the inventory management part of my job, and am a bit of a geek about UPCs (if you want to geek out, too, head over to George Laurer’s website – he invented the dang things!)

barcode

You probably don’t care to learn about all the interesting tidbits of barcodes and their invention, but you do probably want to know if you need them for your bath and body products, right?!

Before I answer that question, I reached out to other entrepreneurs I know and asked them if they have barcodes for their products, and why or why not?

Here’s what they had to say:

So far I haven’t gotten them simply because I’ve been pitching only small boutiques that don’t require them. I know it is coming, though–maybe next year. – Stacia Guzzo,¬†Handcrafted Honey Bee

Mine is a hybrid story – a bit of all. I registered with GS-1 and bought 100. The wholesale customers I have who need UPC codes are satisfied and I did not have to buy the 2000+ different skus I actually needed. Then…¬†to sell to Amazon, I bought the cheap ones from a vendor on eBay, as it did¬†not matter to me if they are registered or not for Amazon. – Kathy Dannel Vitcak, The Blissful Dog

I sell most of my wholesale to companies that do not use or require bar codes. I purchased bar codes for my entry into Whole Foods and that fell through due to outrageous insurance requirements. So, I just muddle along without that bit of technology. I have never lost an account because I do not have bar codes. Besides – it’s expensive. – Deb Jasien, Fields of Ambrosia

I have them. I got barcodes specifically to be in a local natural market in my neighborhood. They ended up not placing a reorder but now that I have them, it makes approaching other retailers easier. Recently, we were just accepted by Whole Foods without much fuss. – Maia Roberts Singletary, Astrida Naturals

My story is similar to Maia’s – I got them to wholesale to a couple of local stores. The GS1 fees aren’t terrible for 100 codes, and it’s nice to have that ‘professonal’ touch. It also made for a painless application and acceptance when I wanted to sell on Amazon. Whole Foods is my next goal – once I get over being scared!¬†– Shawna Hearnes Mehaffy, New Leaf Naturals

I use barcodes for all of my products. They allow me to track inventory on my website and are also helpful for those wholesale distributors who may have a physical storefront. Using fulfilment services requires some method of tracking and upc codes as skus makes sense. Even my small local accounts have said they prefer having the code there because it makes their inventory tracking easier. – Amanda Stott, Tiki Bar Soaps

As we started to build our wholesale side of the business we realized that most stores require them. Even the stores we were in before we had barcodes that didn’t require them were quite happy after we got them because it made things easier.¬†It’s important to do before you start planning on wholesaling products because stores take you more seriously. We’ve paid for the initial 100 barcodes so I’m cautious about not having too many scents or sizes. – Cindy Jones, Colorado Aromatics

So, let’s sum that up and add in a few¬†clarifications.

You should snag barcodes for your products if:

  • You¬†want to track your inventory seamlessly across your website, fulfillment programs, and/or inventory tracking software. (Yes, you CAN use barcodes in-house!)
  • You want to sell to¬†stockists who use inventory¬†management software and electronic point-of-sale systems (cash registers) – usually, larger retailers. (Side note: inventory mangement software and digital POS systems are becoming more approachable and cost-effective, so smaller retailers are snagging them, too!)
  • You want to use fulfillment services (like Amazon), work with distributors, or other third party operations¬†that will handle your product.

You probably don’t need to worry about barcodes too much if:

  • You don’t plan on wholesaling or using distributors, fulfillment services, or other third party operations to help sell, manage, or store your products.
  • You can already manage your inventory in-house personally without barcodes.

Alright, fabulous – now we know if you need barcodes, right?¬†Let’s talk¬†a bit more about barcodes…

What is a UPC and how does it work?

upc_a
UPC-A barcode example

First, let’s talk about the parts of a barcode. The barcodes you are likely familiar with and are needing for your products are UPC-A barcodes. They look like the image to the right.

(Side note: did you know that QR codes are a type of barcode? And that the USPS has used two different types of barcodes, Postnet and MaxiCode, to sort mail?)

Each UPC-A barcode contains a couple identifiers that help determine who sells the product (Company Prefix, the first six to nine digits) and what the product is (Item Reference Number, the remaining numbers following the Company Prefix, not including the check digit.) The last number is a check digit, which helps the computer read the barcode properly if another part of the barcode is read incorrectly.

For example,¬†this barcode is from a Pepsi 12 pack (yes, I do still have most of Pepsi and Coca-Cola’s UPC numbers memorized from scanning deliveries, entering sales into the system, and the like. Ha.)

pepsi 12 pk barcode

012000 is the Company Prefix, and it is registered by Pepsi-Cola North America, Inc.
80994 is the Item Reference Number, and it is assigned to Pepsi Cola 12 pack cans.
1 is the check digit

Despite the fact that barcodes are used to relay information to computers when scanned, the information is not stored in the barcode itself. When a cash register¬†scans¬†a barcode, it is¬†looking up the UPC number in the store’s point-of-sale system and inventory management system (in some cases, it’s one in the same!)

From there, the cash register can display the associated product name, price, size, or other information stored in the computer system. It makes it possible for computers to keep a lot of information about a product by using a single identifier number to pull up that information.

When you give a stockist a UPC for one of your products, they will enter your product into their system with their own name, price, description, and other information tied to your UPC.

That’s why sometimes you’ll notice funny product descriptions on receipts or signage, someone typed that information into the system when the product was added to the store’s selection. One of my co-workers once accidentally shortened a product description from Assorted Salt Water Taffy to “SW TAFFY ASS.” ūüėČ

Where do you get barcodes?

GS1 US (formerly the Uniform Code Council) is a standards organization that establishes identification standards for various industries and assigns company prefixes as well as UPCs. They are the only source for tried and true UPC barcodes with official Company Prefixes.

If you’ve looked for barcodes for sale, you’ve probably noticed there are a lot of other websites selling barcodes, too. What’s the deal with that?

In August of 2002, the UCC (now GS1) settled a court case for close to 4 million dollars, as they had changed their terms of service to disallow registered companies from reselling, sharing, leasing, or sub-dividing barcodes from a Company Prefix. Any company who received a Company Prefix prior to that date could continue to sub-divide their numbers.

While some resellers do have real GS1 barcodes from before August of 2002, they can never include a GS1 certificate (many have made up their own certificates which are NOT the same thing.) This is fine and all, except a huge number of retailers require official GS1 registered numbers.

As far as I’m aware,¬†the following retailers require a¬†vendor (you!) to provide a GS1 certificate: Walmart, Kroger, Home Depot, Sears, Lowe’s, PetsMart, Whole Foods, Lord & Taylor, Best Buy, Nordstrom, Wegman’s, CVS, True Value, Macy’s, Kohl’s, Sports Authority, JC Penney, Target, SuperValu, Dillards, Jo-Ann’s, Micheael’s, Sam’s Club, Costco, Fred Meyer, and Bloomingdale’s.

There very well could be many others, but these are all national (or global) companies who have made it a policy to require GS1 registered barcodes as part of their vendor acceptance process.

How many barcodes do I need?

Each product that you create needs it’s own barcode. If you make ten varieties of lip balm, each variety should have it’s own barcode. Where this starts to get crazy is when you make the same product in multiple sizes, as the unique products that need barcodes quickly adds up.

barcodes on a variety of products

For example, let’s say that you offer 4 varieties of soap. Each variety has two different size options: full size and half size bars. Here’s your full product list:

  • Lavender Soap, Full Size Bar
  • Lavender Soap, Half Size Bar
  • Goat’s Milk Soap, Full Size Bar
  • Goat’s Milk Soap, Half Size Bar
  • Citrus Soap, Full Size Bar
  • Citrus Soap, Half Size Bar
  • Cinnamon Soap, Full Size Bar
  • Cinnamon Soap, Half Size Bar

That’s eight products needing barcodes!

While a few smaller¬†retailers are willing to work with you if you use a blanket barcode for a product that is the same price across the board (for example, all your full size bars have the same price and you use the same barcode), this won’t fly with many retailers as it makes a mess of their inventory. They aren’t able to keep track of each individual scents and sizes when they receive new product or sell any of their inventory (the computer can only read the barcode – it can’t tell the difference between a purple soap and an orange soap!)

Alright, so¬†let’s get a rundown:

You probably do not need barcodes if you have no plans of selling to major retailers or working with any other third party service.

If you do need barcodes, you have two options: obtaining a Company Prefix from GS1 or purchasing individual UPC numbers from a reseller.

If you want to sell to national chains or have plans to grow your company beyond a small operation, you should probably go the official route. GS1 has recently changed their fee structure to make it more approachable for small businesses (initial registration sits at $250 for 1 to 10 individual UPCs, with an annual renewal of $50).

If you do not need official barcodes and plan to use them in-house or only plan to sell to small boutiques, you can likely get away with purchasing from a reseller. (George Laurer compiled a list of resellers he believes are selling subdivided numbers ethically.)

You will need a single UPC for each product variation you sell, which is yet another great reason to keep your product line slim.

Now, how about putting barcodes on packaging? We’ll talk about that soon!

Do you have any other barcode or packaging questions you’d like to see answered in the series? Pipe up in the comments and let me know!

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23 Responses

      1. I bought my barcodes when they first came out and don’t have a renewal fee because of the year I bought them “..can I sell them to another compnany and what are they worth ..
        I hold the licenses on the barcode for success plus I have had several company’s approach me to buy them from me it cost me little over $200 originally I put a lot of time and effort. Designing my own labels for products years ago

        1. Doug, I can’t answer that. I don’t know who you bought them from nor what the agreement was when you purchased. I will say, if you are only selling the codes, the work you put into designing your labels isn’t really relevant to the value of the bar codes.

  1. Thanks Kenna. I’d like to know more about the use of barcodes on small products – guest sized shampoo, guest bars, lip balms etc. I have 1000 GS1 barcodes and have my head around that, but we’re wondering how we tackle 4 gram lip balms etc. for our wholesale clients.

    1. Hey Melissa,

      My understanding is that the GS1 has a barcode creator that can help you tackle this and a barcode implementation guide. I’m not sure, as GS1 membership was financially unattainable when I was in business (before they lowered the membership cost) so I have not seen what resources they give members.

      From experience as a buyer at a retailer, here’s two things that might help:

      – You can use a UPC-E barcode instead of UPC-A. UPC-E are about half the length of UPC-A and compress the barcode into a smaller area.

      – The smallest height that most retail scanners can handle is about 1/2″ – about 13 mm or 1.25 cm.

      Hope that helps!

  2. I have to say that the whole UPC thing from UPC to GS1 is so frustrating to me. Which printer, which company, how many, do I actually need it…. I have a meeting with a buyer in a couple days for a store that needs UPC codes, and I have no UPC codes (yet)… I’m freaking!!!
    Great article, it helped me calm down a bit

  3. if I am selling individual identical packages of all the same kind of product Do I need a different bar codes on every package, or do I used the same bardode

  4. Hello Kenna. I am presenting some information to a friend about UPCs and she is in the hair product business. I noticed when registering for a company prefix that I was asked about a NDC(National Drug Code) or NHRIC(National Health Related Items Code). Would a soap product or hair care product fall into this category?

    Thanks,

    Lem

  5. Hi Kenna,
    I’m going to start up, but I’m not going to use barcodes for my first product launch. After that, if I found it’s necassary to get barcodes to expand my business, do you think I can start using barcodes even in the middle of the business? Is there any disadvantages if I do so?
    Thanks

  6. Great article. Thanks so much for digging up all the info and sharing it. I used to work as an engineer in a pharmaceutical manufacturing facility, so I know how important legality, UPC codes, and tracking things can be. Now that I’m creating handmade organic products, I wanted to make sure that I’m “doing it right” with the regulations. Your article was perfect in helping me get that figured out!

  7. Thank s a lot for this post! I really think there needs to be a UPC market disruptor but anyhow, I am only selling products through online marketplaces so I bought some UPC codes from a 3rd party reseller JustUpc and they seem to work fine for Amazon.

  8. Great article — and it’s cool to see other people applying enterprise knowledge to smaller scale operations. A couple of things I’d add.

    * Some retailers require the UPC prefix be registered to the manufacturer — find out if that’s the case *before* buying a one-off UPC from a reseller. If it is acceptable to your retailer, UPC codes purchased from a reseller are a great for running a market test (i.e. a store wants to put two of your products on shelves for six months to see how they sell) or for scenarios where you have five or fewer products (more than five products and the initial fee + annual renewal save money after some number of years). Confirm the viability of a resold UPC with your particular retailer. Lots of delay and wasted money f you think you’re meeting the requirements because you’ve got a one-off UPC from a reseller, find out the retailer cannot use it, have to register for a prefix, and then re-do all of your bar codes with the new prefix.

    * If you are *only* using your bar codes in house, you may not need a registered code. Running your own store, your point of sale system may need a valid UPC/EAN/something. Or it may accept whatever input and map that over to a product name & price. If you are not using a POS, i.e. using bar codes for inventory management, then there’s really no requirement to use UPC codes. Just keep your identifiers out of UPC/EAN/etc ranges. We did a lot of inventory management using code 39 bar codes with internally maintained numbers. Use letters in the codes and the code will not collide with anyone’s UPC/EAN. If we called ABCDE12345 magnesium oxide powder and a manufacturer down the street uses the same identifier for 8′ long 2×4 lumber … so what? Our people aren’t walking around their warehouse picking materials. Saves a little bit of money (or a lot of money if you use numbers for raw material inventory tracking too). I personally put the internal inventory management bar codes on bin/box/shelf tags (i.e. not something on the finished product label) to avoid anyone confusing the tag for a registered UPC number.

    * You don’t have to have someone print a bar code for you. There are EAN and UPC fonts. I’ve always tested a sample before printing a whole run of codes, but I’m a little paranoid (and have the means to test scanning a code). You can get little sticky labels to make your own adhesive bar codes, print sheets of punch-out tags that attach with a string or plastic fastener, or include a bar code on a packaging design that will be printed for you.

  9. What is a good system for tracking all incoming and outgoing inventory? Also, what magic can I do with the numbers it collects? Aside from the obvious answer of do I have enough to make my soap or fulfill an order.

    1. Hello, Anne Marie,
      While some people work magic with spreadsheets, I would strongly suggest talking advantage of some of the software available. Kenna is a huge fan of Soapmaker, while I opted for Craftybase. What works for you is going to depend on your needs and wants. We lay down some comparisons here: https://www.modernsoapmaking.com/craftybase-inventory-management-soapmakers/

      Oh, those numbers! They are invaluable for everything from doing your taxes to deciding what products to nix. They can help you see if it’s worth doing a particular show again next year, and they can make putting together your production calendar a breeze.

      We will be looking at a lot of those numbers when we start Courage to Conquer, the biz review and planning program that Kenna offers every year, so stay tuned for slots to open up on December 26.

      I don’t personally have experience using barcodes in inventory management in-house, but it can be done. (I’ve known people who did it with their own programs). You can hit up Craftybase’s customer support or the SM3 Facebook group (https://www.facebook.com/groups/SM3Support/) to see what’s possible.

      Hope that helps!

  10. I’m working on some designs for some chapstick and I’m having a bugger of a time figuring out how to fit the UPC code into the design. The label is only 1.75″ top to bottom and a UPC code at 80% is still 1.168″ tall (it’s on its side of course) and still requires that .3″ space from the edges. After some maths, you see that’s 1.768″, taller than the label itself.
    I’ve been consulting this doc but have hit a wall. https://www.gs1us.org/DesktopModules/Bring2mind/DMX/Download.aspx?Command=Core_Download&EntryId=552&language=en-US&PortalId=0&TabId=134
    Any advice would be appreciated!

  11. Im just about to get started with barcodes. Should I be getting EAN13’s instead of UPC’s now? If so, are they still bought and licensed from GS1? Thank you

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