Why UPCs Are Needed
The backbone to standardized product identification is TRUST. The UPC (Universal Product Code) is a standardized identifier that enables suppliers the ability to sell to online marketplaces and retailers, around the globe, with a single barcode identifier that is universally accepted. The global identification standards and administration is through GS1, whose function is to guarantee unique company and product identifiers.
The UPC Company Prefix is a unique identifier which represents a particular company, and is used in other types of barcodes in addition to the UPC. When a company purchases a UPC from a “reseller” they are only receiving a single UPC number whose company prefix is currently assigned to another company. In fact all of the companies who purchased UPC’s from this company will have identical prefixes.
Buyers Beware
Although it might be very enticing to buy cheap UPC barcodes from an unauthorized 3rd party reseller, prospective buyers need to understand the limitations and potential problems that may arise. Over the past twenty years, there hundreds of deceptive online resellers trying to sell UPC barcodes that are not actually licensed to a brand owner. These resellers provide UPC numbers that are all derived from common older UPC Company Prefixes that are not associated to clients names. As indicated in the table below, there are some instances where these discount UPCs may be acceptable, but companies should otherwise get authentic UPCs licensed to their company (brand).
Problems Caused by Using UPCs with Shared Prefixes
First and foremost, Amazon and mid-large retailers require that suppliers DO NOT use shared prefixes and only obtain UPCs with GS1 Company Prefixes licensed to suppliers’ brand names. These organizations rely on the structure of unique Company Prefixes to insure accurate product identification, facilitate efficient supply processing and combat counterfeiting. It is very common for retailers to have explicit instructions for business requirements, including UPC barcode identification. Here are some examples:
- Amazon UPC Policy During their early years, Amazon did not adequately convey unified UPC requirements and consequently had problems with trusting the UPCs being provided by suppliers.
- Walmart UPC Update Walmart’s reliance on GS1 standards covers both items identification and carton marking (GTIN-14). In fact, Wal-Mart has posted the following statement on their website due to the problems caused by the confusion: “Please enclose in your proposal packet a copy of your UCC (GS1) membership letter reporting your firm’s actual number. You must be registered directly with the UCC (GS1) and not through a third party.”
- Google Merchant Center Google Shopping requires GTINs for brand name products sold by multiple merchants. Google Product Feeds must now not only have GTINs, but Google is will be testing the accuracy of the data provided by manufacturers.
The Crucial Question: Where Will Your Products Be Sold?
UPC used for: | GS1 Global Standards | 3rd UPC Resellers | Internally Assigned |
---|---|---|---|
Products being sold by national retailers such as; Amazon, Walmart, Kroger, The Home Depot, CVS, Target and JC Penney. | ✔ | ✖ | ✖ |
UPCs (GTINs) to be used by Amazon Vendor Central or Amazon Seller Central. | ✔ | ✖ | ✖ |
GS1 licensed GTINs can have ownership authenticated by trading partners on Verified by GS1 and on GTIN.cloud. | ✔ | ✖ | ✖ |
Items being sold by local stores and certain regional retailers. | ✔ | ✔ | ✖ |
Products being sold to a distributor under their label. | ✔ | ✔ | ✖ |
iTunes and Spotify or music titles. | ✔ | ✔ | ✖ |
Items being sold on your own website, or used internally to support accounting or internal POS system. | ✔ | ✔ | ✔ |
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Is purchasing a single UPC from a reseller legal?
UPC barcode identification is voluntary and including UPC barcodes on products is not technically a legal requirement. With the exception of FDA-related identification requirements for medical devices and drugs, there is no global legal identification requirement. On the contrary, including GS1 UPC barcodes can only make a company’s products more attractive to potential trading partners and also aid in discoverability on search engines and ecommerce sites.
The Origin of 3rd Party UPC Resellers
Before 2001, the Uniform Code Council (UCC) managed Universal Product Codes (UPCs). The UCC later merged with GS1 Global, becoming a local office called GS1 US. After this merger, GS1 US saw an opportunity to increase revenue and began charging annual fees to maintain Company Prefixes. Original UCC members contested this change through a class action lawsuit that reached the US Supreme Court. The resulting settlement established that UPCs issued before August 28, 2002 were exempt from GS1 annual fees.
Since the original UPC Certificates contained no restrictions on transferability, this led to the emergence of a secondary market of third-party UPC resellers. Potential buyers should be cautious, as many online offerings in this market contain inaccurate information or misinformation. It’s essential to understand the associated risks before making any purchases.
How Do You Determine The Legitimacy of a Reseller?
Many of these companies have been providing single UPC barcode assignments for years and other pop up every week. Unless the reseller discloses that the use of the provided UPCs is limited and buyers need to fully understand their exposure, companies should be skeptical and not believe every word on their website. A few of the large advertising UPC resellers (Nationwide Barcodes and InstantUPCCodes) were charged for violations from the FCC. Since the success of your company on the line, the small savings might now be worth the risk.
Where do companies go to purchase UPC Codes?
The most secure and advisable method for obtaining barcodes is through the GS1 Barcode Service, which provides GTINs officially licensed to your specific company or brand. GS1 functions as the worldwide standards organization responsible for overseeing specifications and managing the licensing of unique identifiers. Your regional GS1 office can provide either individual GTIN assignments or Company Prefixes that grant access to blocks of GTIN identifiers, based on your quantity requirements.
Lessons Learned By Other Small Companies
Real stories by companies who first purchased 3rd Party Reseller UPCs and realized too late that they should have licensed UPC barcodes to their company.
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