Resources

by Jake Wengroff

As businesses try to manage every expense, they might try to cut corners when it comes to packaging or labeling. Included in the cost of labeling are barcodes, which serve as the unique identifiers for products. 

In addition to the cost of printing and affixing labels to a product’s packaging, the barcode serves as yet another expense. In order to obtain a barcode, a business is required to register with the global organization that maintains the global barcode database, or pay a service provider to do this on their behalf.

However, cutting corners will most certainly backfire. We’ve assembled five reasons why you can’t simply make up your own barcodes, print them from your office printer, and affix them to your products.

1. It’s illegal

Many people mistakenly think that barcodes are just random numbers generated by a computer. This couldn’t be further from the truth. Barcodes are unique, and their integrity is maintained by GS1 US, the not-for-profit organization tasked with maintaining standards in product identification.

A Universal Product Code (or UPC) is the most common type of barcode symbol. A UPC barcode is encoded with a product Global Trade Item Number (GTIN), making it easy to track a product on its journey from the manufacturer to the warehouse to the retailer to the customer. 

To create UPC barcodes and GTINs for products, ecommerce companies and businesses need to obtain a GS1 Company Prefix from GS1 US via a license agreement. The Company Prefix makes up the first few numbers of a GTIN and links your brand with your products. This does represent a cost to businesses of all sizes, and it cannot be ignored.

2. Many retailers require registered numbers

Many retailers require their suppliers to use Global Trade Item Numbers (or GTINs) in their product identification processes. These numbers uniquely identify a product when it is listed online or read by a barcode scanner. 

If the barcode isn’t registered, quite simply, you won’t be able to do business with them.

3. You will not be able to keep track of your inventory

For small e-commerce companies just starting out, there might not be a large number of different products (sizes, colors, etc.) or inventory. Such startups may figure they can cut corners by coming up with a handful of barcodes on their own, thinking that no one will notice.

However, if you plan on growing your company and planning on wholesaling or using distributors, fulfillment services, or other third-party operations to help you scale your business, fake barcodes are not going to cut it. Some of these distributors and fulfillment services have seen thousands of barcodes from hundreds of companies, and they might be able to spot a fraudulent barcode quickly.

4. It will create errors at the point of sale

It’s quite possible that a retailer, either brick-and-mortar or online, will accept your products with their fake barcodes, not knowing that you created those codes in-house without registering them.

It may be smooth sailing for a while, but at some point, there will be errors. The error might occur when the product is scanned at the warehouse or point of sale, and an error message occurs — or when the product description does not match the actual product. Such error messages will be a red flag for the retailer, who, if this occurs with frequency, might discontinue selling your products.

5. You will infuriate other manufacturers and retailers

That said, if your fake barcodes create an error for the retailer, consider yourself lucky. What would happen if the fake barcode happened to match a product of another, well-known manufacturer? Larger brands with years of experience in packaging, working with retailers, and inventory and point-of-sale systems would find out quickly that another company used one of their UPC codes in a warehouse or transaction.

That manufacturer might simply send a cease-and-desist letter, or they could threaten legal action.

Is There Any Situation in Which You Can Create Your Own Barcodes?

Some companies create their own in-house “personal” barcodes for the sake of just keeping track of products internally. These products would not be for distribution, shipment or point-of-sale. As such, in this situation, companies can create their own barcodes. However, of course, there still do exist standards.

The most popular of these barcode standards are Code 39 and Code 128. These codes point solely to a business’ internal database and will not pull up product information on another system.

For All of Your Barcode Needs

Developing a product takes time and effort, but distributing it and selling it can be made easier with barcodes. 

Bar Codes Talk has helped over 150,000 companies streamline their operations and deliver their products to both offline and online retailers. 

Unsure which barcode is right for your product? Confused about which barcode is accepted by a particular retailer? We can answer your questions. Contact us today!

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce and IoT.

Sources

GS1 US - Barcodes in Action