What Are the Most Important Differences in Comparing SKU vs UPC?

If you’re new to barcodes and product identification codes, you may hear the terms “SKU,” “UPC,” or even the redundant “UPC code,” and you might hear them used interchangeably. 

While these two types of codes have several things in common, they’re actually quite different—and they’re not simply interchangeable.

Let’s take a quick look at what they have in common, as well as the key differences between a SKU and a UPC.

What is a SKU and How is it Used?

SKU is short for “stock-keeping unit,” and SKUs are essentially internally generated and used. So they’re not licensed or managed by any standards-maintaining organization. At the same time, there’s no cost to create or protect one—but managing a system of SKUs can require time, effort, and tools. 

Many companies use SKUs to keep track of products and manage inventory and/or assets internally, whether for retail or operational purposes. SKUs can be printed on barcode labels affixed to items as well as their corresponding shelves or storage spaces.

SKUs are typically alphanumeric—that is, they include both letters and numbers—and businesses often code attributes of the item into that alphanumeric code. For example, manufacturers, production dates, colors, etc. can all be attributes reflected using letters, and numbers in the SKU.

because they’re used internally, they only need to be unique inside that organization. So if two companies have identical SKUs on different products, it shouldn’t matter, because SKUs aren’t for external use. Depending on the system used to generate SKUs and the number of items an organization needs to label, repetition (and chaos) can be a risk.

How is a UPC Different From a SKU?

A Universal Product Code (UPC), or UPC barcode, is a type of Global Trade Item Number (GTIN), which makes items trackable through the global supply chain. A UPC is a standardized, 12-digit, numeric-only code. 

Manufacturers can purchase and license UPCs from GS1. GS1 is a licensing and standards organization that ensures each UPC is a unique identifier and assures interoperability between organizations. 

That interoperability and standardization mean that the UPC for an item doesn’t change, and any business can identify the item by scanning its barcode. It also means there is a cost for a universally interoperable UPC.

Many leaders in the retail supply chain require suppliers to affix UPC barcodes to items as a condition of doing business with them.

Side-by-Side Comparison: How to Tell a SKU from a UPC

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