What is Barcode / UPC?

A barcode is a method of representing data in a visual, machine-readable format using patterns of parallel lines (one-dimensional barcodes) or geometric patterns of squares, dots, or other shapes (two-dimensional barcodes such as QR codes). In commerce and inventory management, barcodes serve as the primary mechanism for quickly and accurately identifying products, tracking inventory, and facilitating point-of-sale transactions. The Universal Product Code (UPC) is the most widely used barcode standard in North America, consisting of a 12-digit numeric code that uniquely identifies a specific product from a specific manufacturer. UPC barcodes appear on virtually every consumer product sold in retail environments and are managed by GS1, the global standards organization that assigns manufacturer identification numbers and maintains the integrity of the product identification system worldwide.

Why It Matters

Before barcodes became ubiquitous in the 1970s and 1980s, retail and inventory operations relied on manual data entry — cashiers typed prices and product codes, warehouse workers recorded stock counts by hand, and inventory records were maintained on paper or in spreadsheets. This manual approach was slow, labor-intensive, and riddled with errors. A single keystroke mistake could record the wrong product, the wrong quantity, or the wrong price, creating cascading inaccuracies across inventory records, financial reports, and customer receipts.

Barcodes transformed commerce by making product identification instant, accurate, and automated. A barcode scanner reads the encoded data in milliseconds with near-perfect accuracy, eliminating the delays and errors of manual entry. This speed and accuracy compound across every touchpoint in the supply chain — receiving, put-away, picking, packing, shipping, point of sale, and returns — making barcodes one of the most impactful technologies in the history of retail and logistics.

For inventory management specifically, barcodes enable capabilities that would be impractical or impossible without them. Cycle counting becomes dramatically faster when workers scan products instead of manually recording SKUs. Warehouse receiving can verify incoming shipments against purchase orders instantly by scanning each item. Pick-and-pack operations achieve higher accuracy when pickers scan items to confirm they have selected the correct product. And real-time inventory tracking across multiple warehouses and sales channels depends on the ability to identify and record product movements at machine speed, which barcodes make possible.

UPC codes specifically matter because they provide a universal product identification system that is recognized across the entire retail ecosystem. When a retailer scans a UPC at the point of sale, the system knows exactly which product it is, who manufactured it, and what price to charge — regardless of which retailer is selling it or where in the world the transaction occurs. This universality is what makes UPCs essential for selling through major retailers, marketplaces, and distribution networks that require standardized product identification.

How It Works

Understanding barcode technology requires distinguishing between the different standards, their structures, and their applications:

• UPC-A (12 digits): The standard retail barcode in North America. The first digit is a number system character that identifies the product category (0 for most standard products, 2 for variable-weight items, 3 for pharmaceutical products). The next five digits are the manufacturer identification number assigned by GS1. The following five digits are the product item number assigned by the manufacturer. The final digit is a check digit calculated from the preceding eleven digits to verify scanning accuracy.
• EAN-13 (13 digits): The international equivalent of UPC-A, used primarily outside North America. EAN-13 includes a country code prefix and is compatible with UPC-A — a UPC-A code can be converted to EAN-13 by adding a leading zero. Most modern scanning systems read both formats interchangeably, and the two standards are collectively known as GTIN (Global Trade Item Number).
• Code 128: A high-density barcode symbology used extensively in logistics, shipping, and warehouse operations. Code 128 can encode all 128 ASCII characters, making it suitable for serial numbers, lot numbers, container codes, and other alphanumeric identifiers that go beyond simple product identification. GS1-128 (formerly UCC/EAN-128) is a standardized application of Code 128 used for supply chain barcodes on shipping labels and cartons.
• QR codes (2D): Two-dimensional barcodes that can store significantly more data than one-dimensional barcodes — up to several thousand characters. QR codes are commonly used for marketing links, mobile payments, and applications where a URL or large data payload needs to be encoded. In inventory management, 2D barcodes like Data Matrix codes are used for tracking small items, pharmaceutical products, and electronic components where space for a traditional barcode is limited.
• Scanning technology: Barcode scanners use laser, LED, or camera-based imaging to read barcode patterns. Laser scanners project a beam across the barcode and detect the reflected pattern. Image-based scanners capture a photograph of the barcode and decode it digitally, which enables reading 2D barcodes and damaged or poorly printed codes that laser scanners cannot handle. Mobile devices equipped with cameras and barcode scanning software have made scanning accessible without dedicated hardware.

Obtaining UPC Codes

Businesses that need UPC codes for their products must obtain a GS1 Company Prefix, which is the manufacturer identification portion of the barcode. GS1 US administers prefix assignments in the United States. The cost depends on the number of unique products that need barcodes, with annual renewal fees required to maintain the prefix. Once a prefix is assigned, the business creates individual product numbers for each item in its catalog and generates the corresponding barcode images for printing on packaging and labels. It is important to avoid purchasing UPC codes from unauthorized resellers, as these codes may be duplicates or may not be properly registered in the GS1 database, causing problems with major retailers and marketplaces that validate UPC authenticity.

How Nventory Helps

Nventory integrates barcode and UPC management directly into your inventory workflows. Each product record supports UPC, EAN, and internal SKU identifiers, with automatic cross-referencing that ensures consistency across your catalog. Barcode scanning support for receiving, cycle counting, and pick-pack-ship operations is built in, enabling your warehouse team to work at scanner speed rather than keyboard speed. When listing products on marketplaces that require valid UPC codes, Nventory maps your internal SKUs to their corresponding UPCs automatically, preventing listing errors and ensuring compliance with marketplace product data requirements. Whether you manage dozens of products or tens of thousands, Nventory's barcode infrastructure keeps your product identification clean, consistent, and scannable across every channel and warehouse.