Making Sense of a SKU vs. UPC vs. PLU

Last Updated on August 2, 2023 by Labib Ahmad

What are product codes?

Before we can understand the difference between a PLU code, or SKU vs UPC, let's discuss product codes. Product codes can be alphanumeric codes (ABC123) or numeric identifiers (12345) that are applied to products to help identify and categorize them within a system, often in inventory management systems. They serve as an easy way of representing specific products and are used for various purposes, such as inventory management, pricing, and tracking. SKUs, UPCs, and PLUs are all product codes. 

SKU vs. UPC vs. PLU

Knowing how to differentiate between different product codes can help your business streamline its assets, provide memorable customer service, help with inventory management, track sales, identify inventory, and more.

Product codes are not all equal; the different codes are used to differentiate various product characteristics and are assigned by different organizations depending on the function of the code.

What is a SKU code?

An SKU, short for Stock Keeping Unit, also known as an SKU number, serves as a unique identifier to distinguish between various products at the retail or store level and consists of a unique alphanumeric code. Among the three product codes discussed in this article, SKU codes stand out as the ones that you have the flexibility to assign to your products personally. Due to this customizable feature, SKU codes are not universal; instead, they are exclusive to your products and stores. Therefore, even if two different businesses are selling the same product, they will probably utilize different SKU codes for their inventories.

What are SKU codes used for?

An SKU code enables you to conveniently gather specific information about a product. Using custom SKU codes is a great way to organize your product catalog and manage your company's inventory.

Here are some of the key uses of SKU codes:

• Inventory management: SKU numbers are used for tracking inventory. Each variant of a product has a unique SKU Code. For example, a shirt that comes in various sizes will utilize a different SKU code for each size. This approach allows businesses to efficiently track stock levels and identify which sizes require restocking.

• Sales and Point-of-Sale (POS) systems integrations: SKU codes are commonly used in retail businesses and integrated into point-of-sale systems, allowing for accurate pricing and an optimized inventory management system.

• Data Analysis: By associating SKU codes with sales statistics, businesses can analyze product performance and identify best-selling items.

Where are SKU codes used?.

The most common places to use SKU codes are:

• Retail stores
• Warehouses
• Product fulfillment centers
• ECommerce business/eCommerce platforms
• Catalogs

What is a UPC Number?

UPC stands for Universal Product Code; these 12-digit codes are assigned by the Global Standards Organization (GS1 US) and are universal, so all retailers with the same product will have the same UPCs to reference.

Because UPCs are assigned by an organization, you won't be able to make up a UPC code at the store level and assign it to a product. However, if you're a manufacturer, you can join the organization to have GS1 US assign UPCs to your products. Then, whenever someone purchases a product from you, all those retailers will reference the same UPC in relation to the item.

What are UPCs used for?

By referencing the UPC barcode, you can easily determine specific information about the product, including brand name, item size, and colour, whenever the item is scanned by a barcode reader. Like SKUs, UPC barcodes are useful for managing inventory. They can also improve your organization's productivity because you simply need to scan an item to get the product details instead of manually looking them up or entering them into the company's system.

Where are UPCs used?

UPCs are utilized worldwide and are the most common for inventory management for small and large businesses. They are part of a Universal system and are the most common method for inventory tracking, seamless sales monitoring, and everything in between.

SKU vs UPC vs Barcodes

UPCs are a specific type of barcode, whereas barcodes, in general, encompass a broader array of scannable symbols. While SKUs can also take the form of barcodes, they are not strictly limited to this format. However, UPCs are specific barcodes that adhere to specific requirements – they must consist of 12 digits and exclusively utilize numbers, unlike SKUs that consist of an alphanumeric code.

SKU vs UPC

From a technical standpoint, SKUs are comprised of alphanumeric codes, whereas UPCs consist solely of numbers. The difference between SKUs and UPCs lies in their purpose. SKUs are made for internal use, think shelf tags and labels, while UPCs are for external use. SKUs are generated in-house and exclusively tailored to your business, giving you full control in managing and tracking them, mostly used for tracking inventory internally. On the other hand, UPCs, as their name implies, are universal product codes that you do not create but can still process.

What is a PLU Number?

Finally, we get to PLUs; this stands for Price Look-Up and references the 4-5-digit number that is most commonly used on fresh produce items versus a UPC, which is usually reserved for packaged products. If you've purchased fruit or vegetables at the supermarket, then you've probably seen this code included on the little stickers on your items.

PLUs help retailers manage inventory, process customer purchases faster, and help the IFPS manage and improve the supply chain for the fresh produce industry. The codes are assigned by the International Federation for Produce Standards (IFPS), so much like UPCs, you can't assign a PLU yourself. The IFPS does allow retailers to use a Retailer Assigned PLU Code if there is not a PLU code for the item in the database, or the retailer can apply for a new PLU code.

Final thoughts

Whether your business is using an SKU, UPC, or PLU, it's important to maintain a clear organizational structure for inventory and tracking. Knowing what each code means and how they can be used can help your business identify and track which products are in stock and which ones you need to re-order.