Do Retailers Expect UPC Codes on Makers' Products?
We get a lot of questions about UPC codes since many people think they’re a must-have to jump into wholesale. Often, makers aren’t sure whether UPC codes are needed to start selling to stores – and dread the logistical hassle they imagine is involved.
The good news is that generally, you don’t need UPC codes to sell to independent shops. But, there are some occasions where it may behoove a maker to utilize UPC Codes. So this quick start guide will help you determine if you do need UPC Codes and if so, will get you scanning your products in no time.
In this article we’ll help you with the following questions:
What are UPC codes?
Do I need a UPC code to sell Wholesale?
How much do UPC codes cost?
How do I get UPC codes for my products?
What is a UPC Code?
A UPC Code or Universal Product Code, is a 12-digit number used to identify and provide information about a specific product variable. Originally developed for grocery stores to speed checkout, today they are usually accompanied by a black barcode containing the same UPC Code in the form of a scannable one-dimensional image. When scanned by manufacturers, makers, warehouses, or retail stores it provides information that can be used to track inventory, identify a product’s make, model, price, size, color, .. etc.
UPC Codes and their barcodes can be built into a product’s packaging or placed on a sticker that can be added to the product’s exterior. It may appear that most UPC Codes are similar, but each UPC Code is assigned to one product variable. For instance, if a maker produces a mug in 3 colors, they would require 3 UPC Codes, one for each variable type. If the mug comes in 2 sizes, with 3 colors each, a total of 6 UPC Codes would be required. As your product line expands, so will the total number of UPC Codes required.
There are 12-digits contained in a UPC Code. The first 6 digits are the company prefix and correlate to the registered business of the manufacturer. The next 5 digits identify the specific item and the last digit is a confirmation digit that allows the computer scanning the code to verify that the barcode is valid. If this digit is incorrect, the UPC will not scan appropriately. There is an online database that keeps a record of UPC Codes and their owners. As you can imagine, all of this comes with a price. Which is one reason why many makers choose not to use UPC Codes.
Are UPC Codes Required To Sell Wholesale?
Nationwide businesses like Target, and Barnes & Noble along with some online marketplaces like Amazon and Google Shopping require UPC Codes. The majority of online marketplaces most often used by makers do not require UPC Codes. Local craft fairs and trade shows do not require UPC Codes. And the fact is, most small retail stores and online shops do not require UPC Codes to sell products either. So if you are not planning on selling to nationwide accounts, then you most likely will not need a UPC Code.
Is There a Cost Involved?
There are three types of UPC Code; GS1 US, GS1 US GTIN, and Resold GS1. Each has a different cost and benefit.
GS1 US GTIN or “Global Standards 1 United States Global Trade Item Number” is a UPC Code that comes with a scannable barcode that is sold individually for $30 per UPC Code. GS1 US GTIN assigns you a company specific prefix and does not have to be annually renewed.
GS1 US or “Global Standards 1 United States” is sold in block increments starting at $250 for 10 UPC Codes with scannable barcodes that require an annual renewal fee of $50. This will save you money on the front end but adds up as the years go by due to the annual renewal fees. The price per UPC Code goes down in each subsequent block tier. The price for 100 is an initial fee of $750 with a renewal fee of $150. And if you want to purchase 1,000, the initial fee is $2,500 with an annual fee of $500. If for some reason you decide not to renew your GS1 US barcodes, you are legally required to destroy all existing barcodes that have not been sold as they are no longer valid. GS1 US also provide a company specific prefix. You may purchase more than you need at any given time but you still have to pay the annual renewal fee even if you have unused UPC Codes.
Re-sold/ Re-packaged GS1 US are exactly what they sound like. Another company purchases a large amount of GS1 US and re-sells them in smaller increments to small businesses. This was a popular option for small businesses prior to 2002 because until that point the lowest increment available for GS1 US was 100 and GS1 US GTIN was not available then. Re-sold GS1 US have an average price of $25 per UPC Code and the annual renewal cost varies depending on where you purchase them.
Re-packaged GS1 US are not the best option today because GS1 US GTIN allows small businesses to purchase individual UPC Codes with no annual renewal fee. Additionally, because these codes were purchased under a different business, the company prefix will not pull up your business name but the company you purchased the re-packaged GS1 US from. It is not unheard of to purchase a re-packaged GS1 US that was sold to another small business that will pull up their product information instead of yours. Or worse, a fake GS1 US that does not work at all. And because they were re-packaged, you have no recourse to get your money back or the cost of the packaging you incorporated the useless UPC Codes into.
Note, on occasion small shops may use their private in-store barcodes that are not registered or used outside their establishment. In those cases, the retailers will either send you scannable barcodes to affix before shipment or they will apply them during receiving. This type of UPC Code or barcode should not cost you a fee.
Below is a table that breaks down the cost and type of UPC Code. If you choose to use UPC Codes in your business, we recommend purchasing GS1 US GTIN or GS1 US directly so that the risks associated with re-packaged GS1 US are eliminated.
UPC Code Cost Table
If you are on the fence about how many or which UPC Code to purchase, try out the GS1 Barcode Estimator tool here LINK. This easy tool takes the guesswork out of your purchase decision.
If I Decide to Incorporate UPC Codes Into My Business, Where Do I Start?
GS1 US and GS1 US GTIN can both be purchased via GS1’s website LINK. Once purchased you will be given your company prefix and access to GS1’s Software to create barcodes. From there utilize the user-friendly GS1 Software to create barcodes for the products that require labeling. This software will also allow you to input details about each product. Finally either incorporate into your packaging or print the needed UPC Code and Barcode on a sticker and apply.
Long story short – you likely don’t need UPC codes if you’re just starting with wholesale or if you don’t intend to sell to nationwide retailers. And, even if you do eventually need UPC codes, it doesn’t have to be a hugely complicated or prohibitively expensive project. Usually, by the time you get to the point of needing them, the investment feels relatively small. So get to work building wholesale – and don’t let concerns about UPC codes get in your way.
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