As a consumer, you’ve probably noticed how nifty and efficient
Universal Product Codes are. And as an entrepreneur, you may have
figured out that having UPCs or bar codes on your products could be
important for ensuring their success at retail.
the unique configurations – consisting of a block of black and white
bars with an accompanying number ? that appear on each individual
product in the American retailing system. Because they help standardize
the identities of millions of products across various manufacturing,
distribution and retailing systems, UPCs have become crucial for making
sure that everyone in the marketplace is buying and selling exactly
what they think they’re buying and selling.
startups, getting UPC codes for your products has become part of the
price of admission for scaling up your production, distribution and
sales. Here’s what you need to know:
What exactly are UPC codes?
is a set of alternating black and white bars representing numbers (12
in the U.S.; 13 in Europe) that scanners recognize as unique from every
other product. These markers caught on in the U.S. grocery business
more than 30 years ago after the feds instituted new standards for
nutritional labeling on food containers.
not-for-profit group GS1, based in the United Kingdom, administers UPCs
globally. Among other things, there’s a move afoot within GS1 to extend
U.S.-based UPCs to 13 digits. Still, while product-ID standards and
technology continue to evolve, it’s a pretty safe bet that 10 or 15
years from now you’ll still be able to use the same UPCs for your
products that you’re using now.
Do I really need UPCs on my products?
you plan on selling through large retailers, absolutely. You won’t get
far in mainstream retailing without UPCs, because chains depend on
bar-code info provided by their suppliers to ensure accuracy and drive
efficiency in their own sales results, ordering and logistics.
large B2B customers also require you to provide bar codes because they
increasingly rely on the technology as well. And in the B2B and
consumer-retailing worlds, you’ll need UPCs to be able to use
Electronic Data Interchange (EDI) to electronically receive and send
info about orders.
On the other hand, if you mainly sell
to a handful of small B2B customers, you might never need bar codes. Or
if you largely retail your products through mom-and-pop shops,
boutiques, artists’ markets and other small-scale outlets that
generally don’t rely on scanning equipment, you might be able to avoid
the bar-code requirement as well – though you should have your own
internal way of keeping track of individual products.
Sullivan recently discovered the importance of UPCs when Nordstrom and
Bloomingdale’s began requiring her Los Angeles baby-accessories company
to supply them.
“I would have lost an order from
Nordstrom’s several months ago if I hadn’t been able to get up and
running with UPC codes,” says Sullivan, whose Dust Bunnies line
includes baby blankets, boots and other accessories. But the $1-million
company continues to ship its wares to about 600 boutiques without
So, how do you get UPCs?
Fortunately, it’s easy. You need to visit GS1,
a relatively new name for the creator and keeper of UPCs, then click on
“BarCodes and eCom.” The site will take you step by step through the
sign-up process, asking you to answer a few questions.
pay an application fee of a few to several hundred dollars, then a much
smaller annual fee. The exact amount of the fee depends on your answers
to application questions, including a revenue projection for the next
12 months, and the number of products for which you expect to need
individual UPCs in that time. You won’t be held to the answers, so it’s
OK to guesstimate.
Assuming your application is
accepted, you’ll be e-mailed a “member kit” including company-ID
sub-code that will comprise the first few digits of each of your UPCs.
You supply a few digits by numbering your own products. Then GS1
generates a random number for the last digit of each UPC.
uniformly report that the process is easy and fast. Sterling Ashby, for
example, rushed through his recent UPC application because he wanted to
get bar codes in time to put them on a line of historical-figure dolls
he developed under his startup, Titus Venture Group. It was plenty
“I literally plan to have the first batch
manufactured by mid-October, in time for Christmas,” says the
Washington, D.C.-based real-estate lawyer.
How do I optimize my use of UPCs?
startups suggest assigning UPC management to a specific staff member,
because the cost and inconvenience of lousing it up can be steep – and
UPCs will likely take on more importance as your company grows.
you should try to design bar codes directly into your packaging, if
possible. Most packaging-design firms can do this for you, and you
might also get help from companies that supply bar-code devices and
“I’m designing my UPCs into my packaging
early because I know I’m going to need it as I get larger in my
industry,” says Joel Assaraf, senior vice president of sales and
marketing for TherMark, a Los Angeles-based startup in laser marking.
Our Bottom Line
For many startups, UPC
codes are one of those things that must be tackled, sooner or later.
They’re part of your passport to business growth, so sooner is better.
And, fortunately, they aren’t expensive or hard to obtain.