It’s been 70 years since barcodes were invented as a valuable tool for inventory management, supply-chain management, and sales control. Efficiency, accuracy, and scalability have been the three important pillars of e-commerce business. Barcoding technology worked on the critical aspects of the business. Over the years, it has evolved to offer the foundation for the dynamic e-commerce world.
Barcoding involves the usage of unique, and scannable codes on merchandise. This enables smooth tracking, identification, and management of the entire supply chain – from the warehouse to the end customer. Barcoding allows businesses to reduce errors and optimize their inventory as per the demands of their products in the market.
Importance of Barcoding in E-commerce
Barcodes have a worldwide usage in e-commerce because of their fast return on investment. Usually, an ecommerce brand is sold on various online channels. Each channel would have its own internal identification of a product (channel product ID) once a product is listed. But mapping all these to a common SKU code or UPC or EAN code is required to ensure that the same product gets shipped! Here is where barcodes that encode the SKU code or UPC code on the product come in. Let’s discuss some of the importance of barcoding in e-commerce business:
Enhanced Accuracy and Efficiency
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- Reduction of Human Errors: One inevitable source of human error is manual data entry. Writing product codes, qualities, and shipping addresses manually can lead to errors. Barcodes eliminate these inaccuracies by encoding all the details in scannable symbols. These scannable symbols have the corrected and complete information about products.
- Streamlined Order Processing: Barcoding streamlines order processing by reducing the time and effort required to complete the task. Once orders are placed, with the help of a barcode, retailers can easily identify the product, ship them on time, and track the order until it reaches the end customer.
Improved Inventory Visibility
- Real-time Tracking and Monitoring: Barcode keeps track of products and monitors the changes in inventory as per orders received. This real-time data increases inventory visibility and helps enterprises make an informed inventory decision.
- Inventory Optimization: Barcodes increase inventory visibility by tracking the products throughout the supply chain process. Since the movement of goods can be monitored, enterprises can optimize their inventory as per the demand and supply cycle.
Increased Speed in Operations
- Faster Order Fulfillment: In an e-commerce business, manually recording the complete data of every single product, and managing the total number of orders processed and in transit every single day is time-consuming and immune to errors. Having a barcode system can help you complete the order fulfillment with great speed and accuracy.
- Expedited Shipping Processes: Barcodes placed on a shipped product are readable patterns of parallel lines that store the complete information about the product. This barcode placed products are scanned at each phase of the delivery unit.
Types of Product Information Encoded in Barcodes
Globally, there are a few popular notations for product information like the Universal Product Code (UPC), EAN / IAN (European Article Number / International Article Number), or Global Trade Item Number (GTIN), which utilize numbered barcodes to identify with unique products in a database. These are based on a global standard defined by GS1 organisation and are of predefined length and character types (e.g., EAN-13 which contains 13 digits and UPC-A contains 12 digits).
To generate UPC or EAN codes a brand must get approval from a central body. But SKU or Stock Keeping Unit codes are internal to the merchant’s operations. The merchant can choose a length, prefix and characters in the code as per their inventory system.
How to generate SKU Codes?
The goal of the SKU code generation system should be to generate unique codes for every variant that is uniquely selectable in the inventory system. Consider this straightforward approach for SKU code generation, ensuring the label is generated with ample white space for readability. Tailor the design to accommodate various product sizes and labels in a series using your chosen barcoding tool.
- Categorize products into different categories.
- Further, segment products into categories crucial for analysis.
- Ensure categories have ample space for growth.
- Include a comprehensive set of product attributes.
- Ensure all important product attributes are stored in the SKU master or SKU definition.
- Print all the key attributes on the barcode label for quick identification.
- Design the label, considering visual appeal and clarity of information.
Examples of good SKU codes
Here are a few products and their sample product SKU Codes which describe the Brands, Product, Color and Size of the garments.
- CrazeBrand Shirt Red Small – Cra-SHI-RED-SMA
- CrazeBrand Shirt Red Medium – Cra-SHI-RED-MED
- CrazeBrand Shirt Blue Medium – Cra-SHI-BLU-MED
- CrazeBrand Shirt Black Medium – Cra-SHI-BLA-MED
(Note: In this case it would be indistinguishable from the one above if we used only 1 character from each attribute.)
How to obtain UPC/EAN codes?
Manufacturers usually provide UPC/EAN codes for their products. However, if a product lacks these codes from the manufacturer, or if a manufacturer is venturing into online sales, they must obtain the GS1, formerly known as EAN International. GS1 serves as an official source for company prefixes required creating barcodes for product identification within supply chains.
Is it possible to venture into online sales without UPC/EAN codes?
Marketplaces like Flipkart, Amazon, and Myntra may request the sellers to share the UPC/EAN codes while listing products on the marketplaces. However, it is not a mandatory requirement.
If you do not have UPC/EAN codes, you can apply for:
- Brand Registry
Brand registry is mandatory for selling on Amazon and Flipkart. It involves a legal approval process that usually takes 1-2 weeks to complete. It does not require a renewal.
- EAN/UPC exemption
Amazon provides an alternative by exempting UPC/EAN. The process usually takes a minimum of one month but is valid only for a month upon approval. It needs to be re-applied every month.
Tools for Barcoding in E-commerce
The process of assigning a unique code to each product for easy identification relies on various tools. Let’s learn about different tools used for barcoding in e-commerce:
POS Systems
- Integration with E-commerce Platforms
Retail POS seamlessly integrates with e-commerce platforms, to generate barcodes for products internally. Barcodes are generated and tagged by encoding platform data into a series of vertical lines and spaces of different widths.
Barcoding Software embedded in ERP
- Specialized Inventory Management Systems
Multiple ERP and inventory management barcoding systems embedded with barcode generation capabilities manage enterprises day-to-day business operations including procurement, supply chain management, finance, etc.
- OMS Systems
Certain e-commerce order management solutions have barcode generation features that support order management and order fulfilment systems in e-commerce by reading or scanning barcodes.
Barcode Scanners and Hardware
- Types of Barcode Scanners
Different types of barcode scanners available in the market such as laser scanners, linear image scanners, 2D Area image scanners, Pen wands, CCD scanners, image scanners, slot scanners, presentation scanners, mobile computer scanners, and wearable scanners.
The Continuous Evolution of Barcoding in Inventory Management with Browntape
It is evident that barcoding is an essential tool for e-commerce platforms that can be leveraged to manage inventory and sales. It lays a foundation for efficient order fulfillment, inventory management, and accurate tracking of merchandise. Recognizing the importance of barcoding, Browntape also provides the following impactful features, namely:
- Create SKU codes for your product variants.
- Upload UPC/ EAN codes for the SKUs
- Generate and print SKU barcode labels for your products.
- Bulk mapping of your SKU codes for your suppliers to record products.
- Bulk mapping of your SKU codes to products to be sold on third party marketplaces like Amazon, Flipkart, Magento, etc. These may or may not be the same for the same product.
- Automatically updating inventory and prices across all online and offline sales channels.
