Small business owners wear many hats. You might be the CEO of your brand, and also operations manager, product manager, customer service representative—the list goes on. With a lot to do and not much time, shortcuts can be tempting, especially in the seemingly complex area of product management.
If you’re working with a retailer, chances are they’ve asked you to label your products with barcodes to keep track of your inventory. In your research, you might have come across UPC barcode sellers that bundle readymade barcodes for low prices. This shortcut can end up being costly in many ways.
Here are three reasons to properly barcode your products and avoid expensive mistakes some small businesses have made getting their product to market.
Reason #1: Your Future Growth
Major brands have entire departments devoted to moving products from point A to point B. But you are the company’s Jack (or Jill) of all trades. You work through whatever task comes at you, often focusing on the short term in order to keep the business up and running. Think about this short term task—barcoding your products—as a stepping stone to a long term investment in the product and your business’s overall growth. Sure, you might have one great product now, but what about expansion opportunities in the future?
The process recommended by successful brands and their retailer partners like Walmart, Target and many others is to license a GS1 Company Prefix from GS1 US, the neutral, not-for-profit standards organization. The GS1 Company Prefix is a unique company identification number that represents the first several numbers of a UPC and is one of the main connections between your brand and its products. It represents a brand and ensures that products are identified in a way that is universally accepted by all leading retailers. From there, you can use the prefix to construct your own globally unique item identification number. This is the product’s UPC number, also known as a Global Trade Item Number or GTIN.
The numbers under the barcode have meaning and importance in the supply chain and e-commerce. Many small business owners might not realize that the GTIN encoded in the barcode is like a fingerprint—constructing them properly means you are the only brand with that number. Barcodes that are sold online ultimately identify the brand you purchased them from, or worse, multiple brands that purchased the same barcode. This can cause confusion down the road when your products need to be identified in retailer inventory management systems.
Authentically created barcodes establish your brand in the commercial world. They allow you to participate beyond the first product launch by adhering to standards that have been long recognized by leading retailers.
Reason #2: Your Product Variations
According to best practices, it benefits a business to construct different UPCs for each product variation in their product line. What kinds of product variations? Anything that alters the product from its original state, which means any different colors, flavors, or quantities would require unique identification numbers.
Recently, the owner a Portland, Oregon cidery called Swift Cider, Aidan Currie, described why its valuable to have authentic barcodes for product variation management. Currie suggests that businesses invest in their own GS1 Company Prefix so that they can not only get into retailers’ good graces, but have full control over their products. Swift Cider applies a new UPC to each flavor and package format combination. This helps the small business manage which flavors need to be shipped where, and it also makes it possible to buy scan data from retailers to gain better sales insights. Being able to work with retailers in their preferred data format has allowed Swift Cider to learn how different flavors and package sizes are selling.
Uniquely identifying product variations is becoming especially more important with the rise of e-commerce shopping. E-commerce allows products to be seen by a much larger audience than the confines of brick-and-mortar, and these products can have a much longer shelf life. As a result, eBay, Amazon, and other retailer sites typically require product listings to include UPCs. While the barcode itself may never pass through a traditional point-of-sale checkout scanner, the number encoded in the barcode forms an important bridge between the physical product and its digital representation. Online search engines look for these specific product identifiers to help match consumer search terms with what’s listed on retailer sites. Google requires that listings for name-brand products include authentic UPCs, citing merchants have been able to boost sales conversions up to 20 percent, simply by helping the products become more discoverable by target audiences.
Reason #3: Your Time (and Money)
There are so many misconceptions about UPCs and barcodes that companies which fail to educate themselves on the best options end up ultimately regretting their penny-wise and pound-foolish shortcuts. Many small brands that take barcoding shortcuts have to eventually create authentic barcodes after finding purchased barcodes don’t meet the requirements of a new retailer. Some businesses have put product expansions on hold, discontinue entire product lines, or even completely relabel products because of this mistake.
Sometimes, a business owner is simply unaware of the proper placement and dimension of barcodes. Barcodes can be printed within the design of product packaging, or some businesses print and physically attach barcodes to a product. To optimize readability, businesses should place barcodes on the back side of a package, in the lower-right corner, being careful not to get too close to the edge of the package. You will need some negative space around the barcode to make sure it scans properly.
Currie’s advice to fellow business owners is to follow the old adage “Measure twice and cut once” when designing packaging with UPC codes. Otherwise, the business owner may end up wasting precious time and money reapplying stickers with product codes that fit retailer specifications. For businesses that are still unsure about the process, it may be worth it to explore the option of working with a certified solution provider. These companies are uniquely qualified to help with setting up products, and have extensive knowledge of barcoding.
Ultimately, no small business owner wants to experience costly setbacks that keep them from reaching their fullest potential, or experience delays getting their products on the shelves. Taking the time to become better educated about barcoding leads to more productive relationships with retailers, more operational organization, and peace of mind knowing your company is set up for long-term growth.
