How to Apply for a UPC Number
The mysterious UPC (Universal Product Code) number is everywhere we shop. You will find the iconic twelve digit bar coded number on almost everything you shop for, from the clothes you wear to the can of soda you drink. I will explain what it is and how it is used in retail sales so a business owner can determine if you need it for your products. In the United States of America we use the UPC-A Bar Code Symbology. The UPC-A is a bar coding system that uses twelve digits broken down in to three sections a manufacturer identification number, a product item number, and a check digit. There are some industries, like the publishing industry, that use extension UPC digits but that goes beyond the scope of what we are talking about in this article.
Why do we need a UPC number on our products?
UPC numbers are assigned to a product by either the store that sells it or the manufacturer that makes it. In today’s retail environment the duty to assign a UPC number to a particular item is now left to the manufacturers. So a single UPC number tells us who made a product, what the style/ model is, what the color/ flavor is, what size it comes in and what the wholesale and retail price is. This information is valuable because when a store is placing an order for a product all it needs is the 12 digit number it wants to order instead of having to write out a full description of the product and price. How does this twelve digit number relate all of that information? The answer is a catalog company. A retail store will ask you to upload the UPC number of a product and all the corresponding data to a UPC catalog company, such as QRS or Innovus to name a few. The retail store can then access that data electronically and then knows all of the data associated with a particular product UPC number.
What is a UPC number?
A UPC number is a twelve digit number broken down in to three parts, a UPC manufacturer identification number, a UPC product or item number and a check digit. We will tackle the most complicated issue first, the Manufacturer Identification Number. First, there is only one issuer of valid UPC manufacturer ID numbers and that is the GS1 (Formerly known as the Uniform Code Council). There are some UPC ID resellers that can be found on the web, but there is no guarantee that the number you get from them is unique and only used by you. If you need to get a valid UPC manufacturer ID for compliance with the requirements of a retail store, you will need to get an ID number from the GS1. There are 4 levels of UPC ID numbers and the different levels depends on how many products you sell; a nine digit ID number allows for 100 products (0-99); an eight digit ID number allows for 1000 products (0-999); a seven digit ID number allows for 10,000 items (0-9,999); finally a six digit ID number allows for 100,000 items (0-99,999). The price structure is not fixed for all companies; the larger companies pay more than smaller companies. For instance Heinz the maker of condiments will pay more for a UPC ID number than a start-up gourmet condiment company even if they purchase the same level of ID numbers. This is because the GS1 requires an annual income statement. Heinz cannot low ball this number because their corporate income is a matter of public record.
A small privately owned gourmet condiment company can give any reasonable number and pay the lowest pricing for a particular level of ID numbers. The answer to what level of UPC ID numbers to purchase is as many as you can afford and have reasonable room for growth. Sticking with the example of the small gourmet condiment company say today they have 5 condiment styles, in an average of 2 flavors per style, and 3 container sizes; small for the bachelor, medium for the average family, and large mega warehouse size for restaurants and the “Brady Bunch” family. Today the small gourmet condiment company only needs 30 unique item numbers and purchasing a 9 digit ID number will allow for a little growth. Now say in a few year you now offer 20 condiment styles, if nothing else changes you only have enough item numbers for about 16 unique condiment styles. What happens now? You have to purchase another UPC ID number so you can list more items. You cannot upgrade your existing ID number and you cannot add item numbers “A la carte”; you have to purchase an additional UPC manufacturer ID number.
The correct thing to do is for the gourmet condiment company to purchase at least an eight digit UPC ID number to allow room for growth. A small apparel company does not have the same luxury. Fashion related companies usually need a large number of items per season because of all of the styles, available in multiple colors and a wide range of sizes. Apparel manufacturing companies should always purchase the six digit UPC ID number level if possible and certainly no less than seven digits. It is possible to reuse UPC Item numbers, but most retail stores require that they remain dormant for three to four years. By dormant I mean after a particular product is no longer sold to the stores; they need that time to make sure they sell off any old styles and purge that particular item from their database. In the fashion industry a lot of styles are only made available for one or a couple of seasons before it is retired from being sold. A season usually follows the spring, summer, fall, winter model but some fashion styles my straddle say spring through summer or summer through fall and so on. The bottom line is that some industry have a high utilization of UPC item numbers and would need to purchase the more expensive membership levels upfront.
Between the UPC manufacturing ID number and the UPC item number that covers 11 of the 12 digits of a standard UPC-A number.The twelfth digit is called the check digit. The check digit is calculated by a formula called the UPC Mod 10 or UPC Modulus 10. This formula is applied to the 11 preceding digits and comes up with one number. If any one of the digits is changed in the first 11 digits then the check digit will change. If two or more numbers are changed the likely hood is that the change will be reflected in the check digit, but the more numbers are changed the possibility of calculating the same check digit increases.
Why would I need a UPC ID number?
A manufacturer of a product would only need to apply for a UPC ID number if the retail store you are selling to requires it. If your business sells to small or boutique stores then you might need to put a product code or a SKU (Stock Keeping Unit) number, but not necessarily a UPC number. If you sell to large national retailers like JC Penney, Nordstrom, Wal-Mart or some other large retailer they will be doing business electronically through EDI (Electronic Data Interchange). This means you will have to mark the products you sell with a universal number which means applying for a UPC manufacturer ID number and placing valid UPC Item numbers on your products.
I have my UPC numbers how do I mark my product?
All of the retailers that require UPC numbers for products will publish a ‘Routing Guide’ that will give general or specific instructions on how to label, pack, and ship your product. Typically you will need print the UPC bar code and related product information on a sticker or tag that is placed in a visible area of the product.
For more information on applying for a UPC ID number visit the GS1 website or contact the author.