Barcode in eCommerce [Complete Guide]

What is a Barcode?

A barcode is a code consisting of alphanumeric characters and parallel lines of varying thicknesses that machines like barcode scanners read. It usually appears in a square or rectangular image format and contains embedded information.

Barcodes are generally affixed to products or packages. Hence, barcodes and barcoding are extensively used in various stages of eCommerce logistics. They are primarily utilized for identification.

Moreover, it is used for the purpose of tracking, from receiving inventory in warehouses and picking SKUs from shelves to shipping and delivering. Besides this, barcodes have become integral to inventory and warehouse management.

The most distinct features of a barcode are the black bars that usually represent two things. First, the bar width represents the binary numbers 0 and 1. Second, the bar sequence symbolizes the numbers 0 to 9.

When a scanner reads the barcode, it sends the information to a computer that deciphers these lines with a pre-existing algorithm to identify products.

Definition of Barcoding

Barcoding can be defined as the process of generating and embedding relevant information within a barcode and applying it to products or parcels. Barcoding aims to enable the requisite personnel and IoT devices to scan the barcode and accurately retrieve product data. 

Barcoding ensures that products or merchandise is easily identified and tracked for manufacturing, transportation, inventory count, inspection, etc. 

Depending on the requirements, barcodes can contain a wide range of information and can even redirect to external web pages. It is possible to update existing information for relevant purposes during barcoding. 

To better understand barcoding, we can look at the various components of a barcode:

• A quiet zone or white space at the edges of the barcode label.

• A start character. Depending on the barcode format, it has different meanings; in UPC format, it represents product categories.

• The manufacturer code containing information about the manufacturer appears after the initial character string. 

• The product code comprises product identification data.

• A stop or check digit that informs about data accuracy and potential errors.

2 Different Types of Barcodes

Barcodes may come in different formats UPC (Universal Product Code), EAN (European Article Number), and GTINs (Global Trade Item Numbers). However, they are usually of two types: one-Dimensional codes or two-dimensional codes. 

1) One-Dimensional / Linear barcodes

This type of barcode mostly appears on products: a string of alphabets, digits, and vertical black lines tied together as a label. The linear barcode contains information pictorially represented by letters, symbols, and numbers like product type, color, size, and name.

Linear barcode scanners scan the image and send it to a computer containing a database to read the information. Therefore, linear barcodes are generally linked to the database to function efficiently.

To ensure linear barcodes represent the same information to whoever uses them, from manufacturers to 3PLs and courier agents, retailers can opt for universal barcode systems like UPC.

2) Two-Dimensional / QR codes

Two-dimensional (2-D) barcodes are omnidirectional barcoding categories, like QR (Quick Response) codes or data matrices. They generally comprise black squares arranged on a square grid against a white background, with orientation detection patterns embedded into them. QR codes are pixelated. 

The 2-D barcode provides greater storage capacity and faster readability compared to standard barcodes. Though it was initially used in the automotive industry, QR codes are now used in all applications where barcodes are used, including eCommerce.

Two-dimensional codes can include images, website URLs, product quantities, and payment information. Therefore it requires different scanning devices and does not require a database connection.

5 Prime Benefits of Barcoding

Using a barcoding system has multiple benefits, all of which improve operational efficiency and accuracy. Here is a small list:-

1) Tracks and Controls Inventory

Barcodes are a foremost tool in tracking inventory, i.e., monitoring the location of SKUs at all times. As an accessible scanning technology, warehouse associates can easily scan products to count stock arriving and leaving the facility. 

This leaves little room for errors and accounts for all the inventory arriving at the facility, SKUs picked and packed, and finally shipped. This is especially true in the case of eCommerce companies shipping high order volumes. Barcoding enables them to keep an accurate inventory count.

Barcode scanning ensures that product movements are at all times accounted for, including the persons who handle them. By creating a chain of end-to-end visibility, barcodes allow retailers to control inventory with ease.

2) Streamlines Warehouse Functions

Barcodes are often used during the order fulfillment process to eliminate picking errors, invoicing discrepancies, and order processing. 

By facilitating inventory count, warehouses can maintain an accurate stock level, reducing chances of stockouts and allowing for on-time restocking.

Warehouses can compile reports, share documents and maintain inventory management software or ERP systems with a quick scan of barcodes.

3) Acts as a Universal Technology 

Barcodes are universally employed in almost every industry and every country. This ensures that data flows in a global network, facilitating global trade, customs inspection, and auditing.

Its universal adoption also makes it an inexpensive technology that any business can easily install. Using a barcoding system also gives the business credibility to customers.

4) Operational Efficiency

Barcoding system reduces direct manual intervention in data storing and tracking, significantly decreasing the error margin. 

Moreover, barcoding can be implemented to scan purchase orders and retrieve their history, pick tickets, process returned items, and identify employees. 

It can be used as an added layer for securing high-end products. Businesses can choose to optimize their entire operations with barcoding. 

5) Organizes Omnichannel Retail 

With its broad applicability, barcoding ties together in-store retail with eCommerce channels, warehouses with distribution hubs, and customer delivery. 

Barcodes like QR codes can be used for mobile commerce and social commerce, diverting traffic to web stores or purchases during live streaming.

It also opens up different channels of payment and delivery. For example, carriers provide QR codes to display pickup or drop locations. Barcodes can also be used to identify products bought online for in-store returns or pickups. Real-time inventory count with barcodes ensures that inventory is centralized across all sales channels, and retailers avoid overselling. 

5 Strategies to set up a Barcoding System

To set up a barcoding system, eCommerce retailers can follow the below steps:

1) Audit and Create Product Codes

The first step in creating a barcoding system is to count and log all the products, forming a rich inventory database. After that, create a product code or a sequence of alphanumeric strings and symbols. 

The common ones include UPC, EAN, GS1, etc. eCommerce companies can also decide to create in-house code like an SKU (Stock-Keeping Unit) series. The purpose of creating these codes is to assign a unique identifier to each merchandise for in-house or global operations.

2) Generate Barcodes

Once the product codes are decided, the next step is to input them into a system that can translate them into machine-readable barcodes. There are three primary ways to generate barcodes. 

One is to use websites offering barcoding services, i.e., transforming the product codes into barcodes. These free/paid website-based barcode generators can be a good start for small-scale or home-based businesses.

The second is to use a retail POS (point of sale) system. Most POS systems can create barcodes from product codes internally. They also enable simple label printing.

The third is to use devices such as handheld barcode makers. This portable device takes in the code and label information and generates the corresponding barcodes. It also enables retailers to customize the label to include product names or pricing. 

3) Print Barcodes

eCommerce retailers can choose a printer that suits their needs for barcode printing. It can be an inkjet and laser printer or a thermal printer. Each has its advantages and disadvantages. Moreover, they can also choose to order ready-made printed sheets containing barcodes from an online website selling them. 

4) Scan Barcodes

Barcode scanners are the device that makes it possible to read barcodes. eCommerce companies can choose from an array of scanners available in the market. 

Popular choices include laser scanners for one-dimensional barcodes or a CCD (Charge Coupled Devices) device for greater accuracy. For 2D barcodes, they can use an image scanner having a camera.

5) Store Information in the Database

A centralized database is required to store product codes and descriptions and access them from any location the retailer wants. It can be a point-of-sale system or a warehouse management system. The central database can be created in an excel spreadsheet or use cloud-based SaaS tools for creating and storing the database.

What is the UPC Code?

UPC or Universal Product Codes is a globally recognized barcoding format issued by GS1 (Global Standards Organization), which develops and maintains barcoding systems' standards globally. 

The global recognition and acceptance of Gs1 standards make UPC a popular barcoding choice worldwide. It makes a product uniquely identifiable by any POS system, whether in retail or online. 

UPC supports a 12-digit numeric barcode format uniquely assigned to each piece of merchandise a retailer registers for. The set of numbers in the UPC format represents the company name, while the second set identifies the product it is issued for. The last few digits are a confirmation that the code assigned to the item is valid.

Conclusion 

Barcodes are a valuable tool in streamlining and managing almost all logistics processes that require data collection and storage. Barcodes are present everywhere, from inventory management to checkout. 

As a discrete and often affordable technology, eCommerce retailers can establish a barcoding system anytime and anywhere. Using barcodes not only helps with operational efficiency but also gives them validation from customers, given the accuracy point of barcoding.

FAQs

1) How does Barcoding work?

Barcoding involves the creation and generation of barcodes. This means retailers must first audit their inventory, distinguish each product they want to create an SKU for or get a UPC number.

The second step is to create a database for storing product codes, descriptions, pricing, etc.  Thereafter, the product codes are transcripted into machine-readable formats called barcodes. Once the barcode labels are generated, retailers put barcode scanners to work.

2) Where can I purchase a barcode?

There are several ways to create and purchase barcodes, but the globally recognized organization is GS1 for UPC and EAN barcodes. However, many other websites, organizations, and logistics providers offer barcoding, including UPS. 

3) How do barcodes benefit customers?

Barcodes provide a faster and more accurate data transfer mechanism. This enables customers to quickly scan barcodes (QR code/ Data Matrix or linear barcode), provide product information, complete payments, re-order products and verify their purchases.