EDI, UPC, and SSCC –OH MY! (Working with the Big Boys, Part II)

Once you land an account with a large retailer you’ll soon be setting sail into a sea of acronyms and numbers that could make any sane person’s head spin.  Fear not!  Let me take you step-by-step through the process of developing your UPC numbers, registering your barcodes with the retailer, and becoming EDI compliant.  Let’s get started by first discussing the process of creating your UPCs.

Assigning UPC codes

A UPC, or Universal Product Code, is a generic term that refers to your 12 digit Global Trade Item Number (GTIN).  This number will allow your products or services to be uniquely identified when they are being sold, shipped, received, and invoiced in the marketplace. Your GTIN number can contain 14 digits, 13 digits, 12 digits, or 8 digits.  For the sake of simplicity, let’s focus on the 12 digit GTIN that is commonly referred to as the UPC code.

Determining the UPC code for your products or services can be tricky and there are a couple of ways you can go about this.  The first is to become a member of GS1 US, the U.S.-based branch of GS1.  GS1 US (formerly the Uniform Code council) will collect information regarding you and your company and then assign a GS1 Company Prefix to be used as a unique identifier for your company.

Company Prefix + Item Reference Number + Check Digit = UPC number

The item reference number will be assigned by you to identify each of your products.  To assign an item reference number, first subtract the number of digits in your company prefix from 11 to determine how many you will need for your item reference number.  For example, if your company prefix number is 82234600 (8 digits) then 11-8= 3 digits needed for the item reference number.  The item reference number can then start at 000 and increase sequentially to 999.  The check digit is created by calculating other numbers in the string and helps ensure that the data is being used correctly.  To calculate, follow these steps:

• Step 1)   To calculate the check digit, write the 11 digits used for your UPC.  In our example this would be 82234600000 for our first item.

• Step 2)   Then add the numbers in Positions One, Three, Five, Seven, Nine, and Eleven. So 8+2+4+0+0+0 = 14

• Step 3)    Now multiply that number by 3.  14*3 = 42

• Step 4)  Then add the numbers in positions Two, Four, Six, Eight, and Ten.  So 2+3+6+0+0 = 11

• Step 5)   Now add the result of Step 3 and Step 4.  42 + 11 = 53

• Step 6)  The Check Digit is the smallest number needed to round the result of Step Five up to a multiple of 10. In this example, the Check Digit would be 7.

Got it?  This is where the “tricky” part comes in!  Don’t stress too much though, as there is a check digit calculator on the GS1 US website that can calculate the check digit for you.  You can even use their free “Data Driver” online tool to create the UPC’s.  After providing information regarding your product the tool will create an accurate UPC, including the check digit, for you.  Once you have the number for your product, they can then be “tested” for readability and compliance.  This service is a lifesaver!   Becoming a member of the GS1 US is the only way to have an official GTIN (UPC) prefix assigned to your company.  The cost of membership depends on the amount of UPC numbers you will need.  Expect to spend at least $250 to get started and yearly renewal will be at least $50.  (Visit GS1 US at www.gs1us.org and click on “Get Started” to see their pricing options.).

Sharing the UPCs with your Retailer

Once you have assigned UPCs to your product offerings you are now ready to inform your retailer of the codes.  In your “New Vendor” packet you will have received an “Item Set-up Form” which will ask you various questions regarding your products including what their UPC codes are.  Once you complete and return the form to them they will perform a search to confirm the UPCs are registered to your company.  This is the same type of search that you can perform on the GS1 US website using their Global Electronic Party Information Registry.  Avoid any potential problems during set-up by performing the search yourself while you are completing the retailer form. Once the UPC numbers have been loaded into the retailers system, your item will be tracked for sales performance, stock status, and to monitor any damages/returns.

Common Questions….

What if the price seems too high or you only need a handful of UPCs?

There are UPC re-sellers available that will let you “buy a barcode” for $20 to $100 each.  These companies have become members of GS1 US and then paid for thousands of UPC numbers that they are now selling to you for a fee.  While there are some scams out there, many of these are indeed legit and can save you quite a bit of money if you need only a handful of UPC numbers.  However, please note that retailers such as Wal-Mart Kroger, and others  require proof of a GS1 US certificate with your company’s name on it before accepting your product.  A UPC re-seller will not be able to issue you this type of certificate as the UPC prefix will belong to the reseller only.

Do UPC numbers expire?

Your GS1 US company prefix is registered to your company for as long as you are paying your license fees to maintain your prefix license.  You have control of the UPC numbers you create with your company prefix.  You can delete them and reassign them, following  industry standards. GS1 US has resources available on their website to help you.

Are UPC numbers valid only in the states?

No, UPC codes are recognized throughout the world and are the global standard when transferring product information via barcodes.  (Except for books and magazines)

Can a product have different UPC codes associated with it?

Yes, if the product is packaged differently and scanned at point of sale.  For example 1 widget will need a UPC code, as will a dozen widgets, and a case of widgets.  The “widget” would then have 3 different UPCs depending on how it was packaged and sold.

Stay Tuned for Part III, EDI

Questions? Comments?  Let me know!  Leave a comment below or email me at [email protected]

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