# What is a SKU? SKU vs UPC for supply stores

> https://rundoo.ai/resources/guides/what-is-a-sku-vs-upc/

[Guides](/resources/guides/index.md)
/Product

Product

# What is a SKU? SKU vs UPC for supply stores

A SKU is the item code your store makes up for itself, a UPC is the 12-digit number the brand owner licenses from GS1, and most supply stores need both but never need to buy UPCs for the products they resell.

[![Titus Capilnean](https://pub-5247264bd04e4ebeaecbbedb3bebb9f8.r2.dev/static/images/articles/titus-capilnean.jpeg)](https://www.linkedin.com/in/tituscapilnean/)

[Titus Capilnean](https://www.linkedin.com/in/tituscapilnean/), Head of Marketing
October 27, 2026
Last updated October 27, 2026

## What is a SKU?

A SKU (stock keeping unit) is a short code your store makes up for itself to identify each item it carries, while a UPC is the 12-digit number the brand owner licenses from GS1 and prints under the barcode, the same in every store. The SKU is how "the 1 lb box of #8 x 1-1/4 inch deck screws" becomes something your point of sale, your purchase orders, and your inventory counts can all agree on. GS1 US, the organization that runs the barcode system in the United States, describes a SKU as a flexible code you create yourself to track your own inventory, and notes that every retailer who carries the same product will assign it a different SKU to fit their own internal systems. That last part is the key idea, because the SKU is yours. Nobody else in the world uses it, nobody issues it to you, and nobody charges you for it. If you carry 8,000 items, you have 8,000 SKUs, and you invented every one of them.

That's different from the UPC printed on the box, which belongs to the manufacturer and follows the product into every store that stocks it. The two get confused constantly, so here they are side by side.

## SKU vs UPC: what's the difference

The UPC is the 12-digit number under the barcode on the package. GS1 US's formal name for it is a GTIN-12, where GTIN stands for Global Trade Item Number, and it's the only GTIN type that can be encoded in the UPC-A barcode you see at checkout. (Other GTIN lengths exist for other uses: GTIN-8, GTIN-13, and GTIN-14, which shows up on cases.) The brand owner licenses that number from GS1, and the same box of screws carries the same UPC whether it sits on your shelf or a shelf three states away.

Here's the side-by-side:

|  | SKU | UPC (GTIN-12) |
| --- | --- | --- |
| Who creates it | You do | The brand owner or manufacturer |
| Who else uses it | Only your store | Every retailer that stocks the item |
| Format | Whatever you decide (letters and numbers, any length) | 12 digits, licensed from GS1 |
| Cost | Free | Licensed by the brand owner, not the retailer |
| Where it lives | Your POS, your labels, your purchase orders | Printed on the product packaging |

The practical takeaway for a supply store: you will have both, on almost everything you sell. The UPC is what you scan at the counter so checkout is fast and the vendor's catalog matches your records. The SKU is the number your store runs on, the one your crew uses to find the item on the shelf and the one your inventory counts reconcile against. If you're managing [thousands of SKUs across a hardware store](/resources/guides/hardware-store-inventory-thousands-of-skus/index.md), the SKU is the backbone of the whole operation.

## How to create SKU numbers for your store

There's no licensing body and no official format, which is the good news and the bad news. Nobody tells you what to do, and nobody stops you from making a mess. A scheme that holds up over years of truck days follows a handful of rules:

**Keep it short.** Four to eight characters is plenty. Every extra character is one more thing to mishear over the phone when a contractor calls asking if you have something in stock.

**Skip leading zeros.** A SKU like 00412 looks tidy until a spreadsheet strips the zeros and your point of sale can't find item 412, or until half your items are padded and half aren't, so start numbering at 1 and let the numbers grow.

**Avoid ambiguous characters.** The letter O and the number 0, the letter I and the number 1, are indistinguishable on a shelf label printed in a hurry. Pick letters or pick numbers for each position and stick with it.

**Use meaning only where it helps.** A short department prefix earns its place because your crew already thinks in departments: FAS for fasteners, PNT for paint, FED for feed. Beyond that, resist encoding information into the number. Don't build the vendor or the cost into the SKU, because vendors change, costs change, and a SKU that contains last year's cost code is a tiny filing error waiting to happen.

**Never reuse a retired number.** When the old SKU gets reassigned to a new item, your sales history for the discontinued product and the new one get tangled together, and you'll never untangle them. Retire the number and leave it retired.

**One SKU per sellable unit, per variation.** Each size, color, and pack gets its own number. A 1 lb box of #8 x 1-1/4 inch deck screws at $12.40 and the 5 lb box of the same screw are two SKUs, and they may share nothing but a vendor. The same logic applies anywhere the unit you buy in differs from the unit you sell in, like rope or chain bought by the roll and sold by the foot, which is worth its own discussion on [units of measure](/resources/guides/units-of-measure-buy-by-the-roll-sell-by-the-foot/index.md).

## Should you use a SKU generator?

A SKU generator is any tool, often a spreadsheet formula, that assembles SKUs from attributes automatically, and the searches for one suggest plenty of owners are hoping software will settle the numbering question for them. A common pattern is DEPT-CLASS-SEQ: a department code, a class code, and a sequence number, so the 412th item you add under fasteners becomes FAS-412, and the next one becomes FAS-413.

Generators are fine for keeping a big catalog consistent, but consistency is the whole job, and no formula supplies it for you. A scheme you'll follow beats a clever one you'll abandon. Overly clever SKU schemes tend to read like vanity license plates, impressive to the person who designed them and confusing to everyone else at the counter. Pick a pattern, write it down on one page, and train everyone who receives a truck to follow it.

## How to get UPC codes (and when you don't need to buy them)

Here's the part that surprises most store owners: if you resell products from your vendors, you almost certainly don't need to buy UPC codes at all. The UPC belongs to the brand owner, and it arrives on the product. When Orgill or Benjamin Moore or your feed manufacturer ships you product, the GTIN comes with it, printed on the box and listed in their catalogs and price files. Your job is to scan it, not license it.

You only need your own GTINs if you make and sell your own branded product to other retailers or through online marketplaces, which typically ask for a GS1-issued identifier. Think a hardware store that bottles its own line of grill seasoning and wants it carried by other stores. If that's you, GS1 US (gs1us.org) offers two paths: a single GS1 US GTIN for companies with only a few products, where each one uniquely identifies a single retail product, or a GS1 Company Prefix that lets you create many barcodes at once for a growing line. Every product variation, each size and scent and pack, needs its own barcode. As of October 2026, the listed fees were:

| GS1 US license | Initial fee | Annual renewal |
| --- | --- | --- |
| 1 GTIN | $30 | $0 |
| 10 items | $250 | $50 |
| 100 items | $750 | $150 |
| 1,000 items | $2,500 | $500 |

GS1 US reserves the right to change pricing, so check the get-started page before you budget. One warning worth heeding: GS1 cautions that GTINs sourced from unauthorized third parties may already be associated with another company or product. Those cut-rate barcode resellers online are selling numbers that may trace back to somebody else's brand, and untangling a borrowed number is a chore nobody wants on their list.

Now for the items that live only inside your four walls: cut keys, bulk mulch by the scoop, mixed seed, store-bagged bird seed. None of those need a purchased GTIN, because they never leave your store. An internal SKU and an in-store barcode label you print yourself are enough. GS1's global specifications even formalize this: Restricted Circulation Numbers with the U.P.C. prefix 2 are reserved for use inside a company, such as variable-measure items scanned at the point of sale, and they're explicitly not for products traded outside your store. Print the label, stick it on the bag of bird seed, and scan it at the counter like anything else.

## One product, several numbers

A mature inventory record doesn't have one number, it has a small family of them, and keeping the roles straight saves real confusion at the receiving dock. A single product in your store typically carries:

* **Your SKU**, often called the primary ID or item number in your system, which is the number your store runs on.
* **The vendor's item number**, which is how the vendor identifies the product on your [purchase orders](/resources/guides/purchase-order-process-for-retail/index.md) and on their invoices. When your ordering runs over [EDI](/resources/guides/edi-for-retailers-850-810-856/index.md), this is the number doing the talking between your system and theirs.
* **One or more UPCs.** Vendors change UPCs more often than you'd expect, and a case and an each frequently carry different ones: the GTIN-14 on the case versus the UPC on the individual item inside.

Your POS needs to treat all of these as pointers to the same product, so a scan of the case and a scan of the each both land on the right record. This is also the kind of thing to verify before a system switch, because whether your SKUs, barcodes, and vendor item numbers survive the move intact is a fair question to ask, and our guide to [what transfers in a POS data migration](/resources/guides/pos-data-migration-what-transfers/index.md) walks through it.

## How Rundoo handles it

In Rundoo, search matches the product name, the primary ID, additional IDs, and barcodes, so a counter person can type the SKU, scan the UPC, or search the vendor's item number and land on the same product. The [Rundoo Catalog](/product/catalog/index.md) is a vendor-synced search index of more than a million products from connected vendors like Orgill, Benjamin Moore, AllPro, House Hasson, Blish-Mize, and Lancaster, and it searches UPC and product name at the same time. Importing a catalog product creates a product record using the catalog's UPC, name, and vendor as the starting point, so a catalog item doesn't need to be keyed in from scratch. Because importing doesn't auto-dedupe on UPC, if the item already exists in your store you link it to the catalog entry instead of importing a second copy, which keeps one product from wearing two SKUs. And when you need a barcode for the store-bagged bird seed, the [Staff app](/product/staff-mobile-app/index.md) scans products with the phone's camera and prints shelf labels, so the in-store-only items get labeled without a trip back to the office.

Share

Topics

[Product](/resources/guides/index.md#inventory-and-purchasing)

[← All guides](/resources/guides/index.md)

## Frequently asked questions

What is the difference between a SKU and a UPC?

A SKU is an internal code a store creates for itself to track its own inventory, so every retailer carrying the same product gives it a different SKU. A UPC is the 12-digit GTIN-12 the brand owner licenses from GS1, printed under the barcode on the package, and it is the same in every store that sells the item.

Do I need to buy UPC codes to sell products in my store?

No. Products from your vendors arrive with the manufacturer's UPC already on them, and in-store-only items like cut keys or store-bagged bird seed only need an internal SKU and a barcode label you print yourself. You only need to license GTINs from GS1 US if you are the brand owner of a product you sell to other retailers or online.

How do I create SKU numbers for my store?

Pick a short pattern, such as a three-letter department prefix plus a sequence number (FAS-412 for a fastener), and apply it to every item. Keep it under eight characters, avoid letters that look like numbers, give each size, color, and pack its own SKU, never build vendor or cost into it, and never reuse a retired number.

How much do UPC codes cost?

GS1 US, the official source of UPCs in the United States, listed a single GS1 US GTIN at $30 with no renewal fee and a 10-item GS1 Company Prefix at $250 plus $50 a year when we checked in October 2026. GS1 US can change its pricing, so check gs1us.org before you budget, and avoid cut-rate resellers, since GS1 warns those numbers may already belong to another company.

Why does the same product scan as two different barcodes?

Usually because the case and the each carry different codes, with a GTIN-14 on the case and a UPC on the item inside, or because the vendor changed the UPC between production runs. Your point of sale should map every barcode for a product to a single SKU so receiving the case and selling the each hit the same inventory record.

## Find out what Rundoo can do for your business

Learn how Rundoo can help you save time, money and hassle running your business.

[Book a demo](/signup/index.md)

!

## See Rundoo in action

[Product

### Tour the platform

POS, inventory, payments, and AI for independent supply stores, in one system.](/product/index.md)
[Customers

### Read customer stories

See how real paint, hardware, farm, garden, and lumber stores run on Rundoo.](/clients/index.md)

## Keep reading

[![ABC analysis for inventory: classify every SKU](https://pub-5247264bd04e4ebeaecbbedb3bebb9f8.r2.dev/static/images/articles/abc-analysis-inventory-aisle-photo.jpg)

Product

### ABC analysis for inventory: classify every SKU

ABC analysis ranks every SKU by annual dollar movement at cost so your counting, reordering, and vendor attention go where the money is, and here is the step-by-step method with a ten-SKU feed and hardware example.](/resources/guides/abc-analysis-inventory/index.md)
[![Backorder vs special order vs out of stock](https://pub-5247264bd04e4ebeaecbbedb3bebb9f8.r2.dev/static/images/articles/backorder-vs-special-order-photo.jpg)

Product

### Backorder vs special order vs out of stock

Out of stock means your shelf is empty, a backorder means the vendor's shelf is empty, and a special order is an item you never stock that you order for one customer, and each one gets a different answer at the counter.](/resources/guides/backorder-vs-special-order/index.md)
[![Cubic yard calculator: feet and inches to yards](https://pub-5247264bd04e4ebeaecbbedb3bebb9f8.r2.dev/static/images/articles/cubic-yard-calculator-photo.jpg)

Product

### Cubic yard calculator: feet and inches to yards

A cubic yard is length times width times depth in feet, divided by 27, so here is a calculator for rectangles, circles, and triangles with depth in inches, three worked examples, the three mistakes that wreck an estimate, and the conversion to cubic meters.](/resources/guides/cubic-yard-calculator/index.md)