No, a SKU and a UPC are not the same thing. They serve different purposes, follow different formats, and are created by different parties. A SKU (stock-keeping unit) is an internal code a business creates to track its own inventory. A UPC (universal product code) is a standardized 12-digit number purchased from a global standards organization that identifies a product across every retailer and supply chain in the world.
What Each Code Actually Does
A SKU is a code you make up yourself to organize your products. It can reflect whatever details matter to your business: size, color, season, supplier, warehouse location. A small clothing retailer might use a SKU like “BLU-TEE-M-24” to represent a blue t-shirt in medium from their 2024 line. No one outside that business needs to understand or use that code.
A UPC works the opposite way. It’s a universal identifier that stays the same no matter where the product is sold. When a cashier scans a barcode at checkout, the system reads the UPC to look up the product and its price. That same barcode works at any store, warehouse, or online marketplace that handles the product. UPCs are a type of Global Trade Item Number (GTIN), which is the broader international standard for identifying products as they move through supply chains.
How They Differ in Format
SKUs are alphanumeric, meaning they use both letters and numbers. They can technically be any length, though most businesses keep them between 8 and 10 characters. There’s no universal standard for how to structure them. Every company builds its own system. Best practice is to avoid characters that look alike when scanned or read quickly, such as the letter “O” and the number zero, or the letter “I” and the number one. Special characters like dollar signs and ampersands should also be avoided.
UPCs are strictly numerical and always exactly 12 digits. They’re regulated by GS1, an international nonprofit that maintains the global product identification system. Once a UPC is assigned to a product, it’s permanent and can’t be modified. You don’t get to choose a meaningful sequence the way you would with a SKU.
Who Creates Them
You create your own SKUs. There’s no registration, no fee, and no approval process. You can start using them the moment you decide on a naming system. This makes SKUs free and flexible, but it also means your SKU for a product will be completely different from another retailer’s SKU for that same product.
UPCs must be purchased from GS1 US. The process is straightforward: you select how many product codes you need, provide your contact information, and pay. A single GTIN costs $30 with no annual renewal fee. If you need codes for up to 10 products, the initial fee is $250 with a $50 annual renewal. For 100 products, it’s $750 upfront and $150 per year. Businesses with thousands of products pay more, with pricing tiers going up to $10,500 for 100,000 codes. These fees give you a GS1 Company Prefix, which is the foundation for generating unique UPCs for each of your products.
When You Need Each One
SKUs are useful the moment you have enough products that tracking them by memory becomes unreliable. If you sell 15 variations of the same shirt across three sizes and five colors, SKUs let you see exactly which combination is running low. They’re especially helpful for managing warehouse locations, reorder points, and sales performance by product attribute. You don’t technically “need” them in the way you need a UPC, but any inventory or point-of-sale software you use will expect them.
UPCs become necessary when your products enter the broader retail ecosystem. If you want to sell on Amazon, list products at Walmart, or work with any major retailer, you’ll need UPC barcodes. These marketplaces verify the authenticity of your UPCs by checking them against the GS1 database to confirm that the product is linked to your brand. UPCs that don’t match the GS1 records are flagged as invalid, which can block your listing entirely.
Can a Product Have Both?
Yes, and most products sold through retail channels do. The UPC identifies the product universally, so every retailer handling that item uses the same UPC. But each retailer assigns its own internal SKU to track that product within its system. A single product might carry one UPC and dozens of different SKUs across different stores, warehouses, and online sellers.
Think of it this way: the UPC is the product’s passport, recognized everywhere. The SKU is the nickname a specific business gives it for its own records. Both codes can appear on the same label, and both serve essential roles, but they operate in completely separate systems.
Which One Goes on a Barcode?
The standard barcode you see on retail packaging encodes the UPC. This is the barcode a cashier scans, and it’s the one required for products moving through traditional retail and major online marketplaces. SKUs can also be printed as scannable barcodes (often as Code 128 or similar formats), but these are used internally, such as for warehouse picking or inventory counts. They aren’t interchangeable with UPC barcodes and won’t work at a point-of-sale terminal expecting a standard retail barcode.
If you’re selling products only through your own store or website, you can get by with SKUs alone. The moment you need your products recognized outside your own four walls, you’ll need UPCs from GS1.