SKU vs UPC: What's the Difference?
Understand the difference between SKU and UPC codes in inventory management and how each serves distinct purposes in eCommerce operations.
Key Takeaways
- SKUs are internal codes created by each business while UPCs are universal codes standardized globally
- SKUs help with internal inventory tracking and UPCs enable cross-retailer product identification
- Most eCommerce platforms require both SKUs and UPCs for effective product management
What is a SKU?
A Stock Keeping Unit is an alphanumeric code that a business creates internally to identify and track specific products. SKUs encode information meaningful to the business, such as category, color, size, and season. For example, a clothing retailer might use BLU-TSH-M-2024 for a blue t-shirt in medium from 2024. Each business designs its own SKU system, meaning the same physical product carries different SKUs at different retailers. SKUs are essential for internal inventory management and purchasing decisions.
What is a UPC?
A Universal Product Code is a standardized 12-digit barcode assigned to products for universal identification across all retailers and supply chains. Unlike SKUs, UPCs are globally unique and administered by GS1, an international standards organization. The same product carries the same UPC whether sold on Jumia, Takealot, or a local shop. UPCs enable automated checkout scanning, supply chain tracking, and cross-retailer price comparison. Manufacturers purchase UPC prefixes and assign codes to their products.
Key Differences
SKUs are internal and customizable, created by individual businesses to suit their operations. UPCs are external and standardized, identical everywhere a product is sold. SKUs can include letters and numbers in any format, while UPCs follow a strict 12-digit numeric structure. A business can change its SKU system anytime, but UPCs remain permanently assigned to specific products. SKUs are free to create, while UPCs require purchasing from GS1. One product can have one UPC but many different SKUs across retailers.
When to Use Each
Use SKUs for internal operations including warehouse organization, inventory counts, reorder management, and sales analysis by product attributes. African retailers with multiple product variations benefit from descriptive SKU systems that encode size, color, and supplier information. Use UPCs when listing on marketplaces that require them, such as Takealot or international platforms. Manufacturers selling through multiple retailers need UPCs for supply chain efficiency. Small businesses selling handmade or private-label goods often start with SKUs only and add UPCs as they scale.