In the landscape of product identification and inventory management, two critical terms often arise: SKU (Stock Keeping Unit) and GTIN (Global Trade Item Number). Though often used in close contexts, these two identifiers have distinct roles and implications for product tracking and management.
This article delineates the differences between SKU and GTIN, offering a clear comparison to understand their unique roles in business operations. By examining their definitions, applications, and the contexts in which they are used, we will shed light on how these identifiers contribute to efficient product management and organisational effectiveness.
But first, let us learn about what SKUs and GTINs are.
SKUs, short for Stock Keeping Units, are distinct alphanumeric codes businesses employ to monitor and oversee their inventory. Picture them as unique markers for every same product within a store or warehouse.
For example, an SKU may start with letters for the product type, like ‘TS’ for t-shirts. Then, more details are added, like colour and size: ‘TS-RD-M’ could mean a medium-sized red t-shirt.
To better understand SKUs and their critical role in inventory management, you can explore our dedicated article on What is a SKU?
While SKUs are integral to product identification, they are often confused with other types of codes and numbers, like serial numbers and UPCs. To clarify these distinctions, consider reading our articles on SKU vs Serial Number and UPC vs SKU, which provide detailed comparisons and insights into how these identifiers are used in various business contexts.
GTINs, short for Global Trade Item Numbers, are like universal ID tags for products sold worldwide. They’re a series of numbers that uniquely identify a product, no matter where it’s made or sold.
A GTIN comes in different lengths: 8, 12, 13, or 14 digits. These numbers are not random; they follow a specific structure set by global standards.
For a more detailed exploration of GTINs and their importance in global commerce, delve into our comprehensive article on What is GTIN? This resource will provide you with an in-depth understanding of how GTINs function, their various formats, and their role in the worldwide tracking and identification of products.
GTINs are of four different types.
This is an 8-digit code, previously referred to as EAN-8. This compact version of the Global Trade Item Number (GTIN) is designed for small items with limited space for a barcode.
GTIN-8 provides a way to uniquely identify products globally, ensuring consistency in tracking and inventory management.
To learn about EAN barcodes, refer to our What is an EAN Code? article.
This 12-digit numeric identifier, also known as UPC-A, is used primarily in North America.
This format is a key part of the GTIN family. It is widely recognised due to its extensive use in retail, especially in the United States and Canada in the present day.
Refer to our What is a UPC Code? article to learn about UPC barcodes.
Once called EAN-13, this 13-digit identifier is commonly used for products outside North America.
A 14-digit number, GTIN-14, also known as EAN/UCC-14 or ITF-14, is designated for identifying products in bulk or case packaging, often including a level indicator for the type of packaging.
By providing a way to identify larger units of products, GTIN-14 enhances efficiency in inventory management, shipping, and receiving processes across diverse industries. Such include Retail and Wholesale, Manufacturing, Healthcare and Pharmaceuticals, and the Food and Beverage industry.
The key differences between the two have been discussed in a detailed manner below:
Aspect | GTIN (Global Trade Item Number) | SKU (Stock Keeping Unit) |
|---|---|---|
Scope of Use
| Used globally for product identification across various companies and countries.
| Primarily for internal inventory management within a single company.
|
Uniqueness and Standardization
| Globally unique and standardised for universal recognition.
| Unique within a company but not standardised globally.
|
Format and Structure
| Numeric only, following a standardised format (e.g., 8, 12, 13, or 14 digits).
| Alphanumeric, often customised to include specific product details.
|
Creation and Assignment
| Assigned by the global standard organisation (i.e.) GS1 and linked to the product manufacturer.
| Created and assigned by individual businesses based on their internal systems.
|
Purpose and Function
| Facilitates product tracking, identification, and verification in the global supply chain.
| Aids in tracking inventory, sales data, and internal logistics.
|
Visibility and Accessibility
| Often visible to customers, encoded in barcodes for easy scanning and identification.
| Typically used internally, not always directly visible to customers.
|
Integration in Business Operations
| Essential for global trade, product distribution, and retail sales across different platforms.
| Integral to a company’s inventory management, sales tracking, and internal reporting.
|
Global and Local Compliance
| Must comply with international standards and regulations for product identification.
| No specific compliance requirements.
|
Global Trade Item Numbers are designed for universal product identification. They are used across various companies and countries in the global market.
In contrast, Stock Keeping Units are specific to individual companies and used internally for managing inventory. Unlike GTINs, SKUs are not standardised globally.
GTINs are globally unique and standardised. This standardisation is crucial for maintaining a uniform system in international trade.
GTIN standardisation is overseen by GS1, a global system for uniquely identifying products and services. This framework ensures uniformity in product identification across different markets and industries. It facilitates efficient supply chain management, accurate inventory tracking, and streamlined retail processes.
On the other hand, SKUs are unique within each company but do not follow a global standard. Each business creates its own SKUs based on its internal needs and systems, leading to diverse SKU formats that are only universally recognised within the company.
GTINs adhere to a numeric, standardised format, varying in length (8, 12, 13, or 14 digits) depending on the product and region. This structured approach ensures consistency in global product identification.
In contrast, SKUs are alphanumeric and highly customisable. Businesses tailor SKUs to include specific product details like size, colour, or style, reflecting their unique inventory and categorisation systems.
GTINs are globally standardised numbers assigned by organisations like GS1, ensuring each product has a unique identifier linked to its manufacturer.
Individual companies internally generate SKUs tailored to their specific inventory and categorisation needs.
GTINs are often visible to customers, as they are encoded in barcodes on product packaging. These numbers are encoded into barcodes or Radio Frequency Identification (RFID) tags, facilitating automatic and electronic reading of products. This visibility is key for scanning and identification in retail environments, making GTINs an integral part of purchasing.
SKUs, in contrast, are typically used internally and may or may not be visible to customers. It depends on the company’s best practices policy. For example, in a retail clothing store, SKUs are often printed on price tags attached to garments.
GTINs facilitate efficient supply chain management from manufacturers to end consumers. They are often required for products sold on major e-commerce platforms.
SKUs help businesses manage their stock more effectively, from warehouse organisation to point-of-sale systems. SKUs are key in the internal reporting and analysis of items.
GTINs must adhere to international standards and regulations for product identification.
SKUs, in contrast, do not have specific global compliance requirements since they are internally controlled and used within a single company.
Now that we know about the differences between GTIN and SKU, it is time to quickly glance at some of their commonalities.
GTIN and SKU are both used for product identification.
GTIN identifies the same product universally, regardless of where they are manufactured or sold.
However, SKU identifies products in an inventory of a particular business where it is incorporated. SKUs are the same for specific product models that are of the same kind. For example, all t-shirts of M size will have the same SKU for all the products in the inventory.
GTINs and SKUs are extensively used in retail and e-commerce settings, though they serve different purposes within these environments.
GTINs are used for product identification at the point of sale and in e-commerce for listing products on various online marketplaces.
While not typically used for external transactions, SKUs are vital in the internal operations of retail and e-commerce. SKUs are often used to manage product variants and maintain accurate website stock levels.
Both GTINs and SKUs are compatible with barcode technology; they can be encoded in a barcode. This compatibility allows for the easy scanning and processing of product information. It also streamlines numerous tasks, such as inventory management, sales tracking, and checkout processes.
For a more thorough insight into barcoding technology, we invite you to delve into our detailed guides:
Additionally, please visit our comprehensive Barcode Learning Centre for an extensive understanding of barcodes.
GTINs and SKUs are significant in collecting data vital for business insights. This process is key to understanding:
GTINs and SKUs both contribute significantly to enhancing supply chain operations, albeit in different scopes.
GTINs provide a standardised way of identifying products, essential for tracking items as they move through various stages of the global supply chain. This includes logistics like shipping, receiving, and inventory management at different locations.
SKUs allow businesses to do tasks such as warehouse organisation, stock replenishment, and managing product variants.
Here are some key points to help you take the final call regarding which one to choose for your business.
When deciding between GTIN and SKU, consider the scope of your business.
Global Operations: If your business operates internationally or plans to expand globally, GTINs are essential. They provide a universal standard for product identification, which is crucial for international trade and e-commerce.
Internal Management: SKUs are more appropriate for businesses focusing on local operations or needing detailed internal inventory management. SKUs allow you to create a customised system for organising and tracking products within your company.
The choice between GTIN and SKU also depends on your product distribution strategy.
International Market: If your products are sold through various retailers or online marketplaces worldwide, GTINs are necessary to comply with global retail standards.
Local Inventory Control: If your focus is primarily on managing inventory within your own business, such as a local retail store or a specific distribution channel, SKUs are more suitable.
For businesses involved in e-commerce, the choice between GTIN and SKU is influenced by the platform and sales strategy:
Online Sales: GTINs are often required for products sold on major e-commerce platforms like Amazon, eBay, and Alibaba. They provide a standardised way for products to be listed, searched, and compared globally.
In-Store Sales: For businesses focusing on brick-and-mortar stores or those with a primary presence in physical retail, SKUs are more beneficial.
In conclusion, while both GTINs and SKUs are pivotal in product identification and inventory management, their applications and scopes are distinctly different.
GTINs offer a universal, standardised approach for identifying products globally, which is essential for international trade and e-commerce. In contrast, SKUs are more flexible and tailored to individual businesses, which is crucial for internal inventory control and sales analysis.
Understanding the specific roles and functionalities of GTINs and SKUs is vital for any business to efficiently manage its inventory, streamline operations, and facilitate global market accessibility. This comparison between GTINs and SKUs underscores the importance of selecting the appropriate system based on a business’s unique needs and scale.
We hope this article was useful.
Thanks for reading!
GTIN is a standardised numeric code for identifying products globally, essential for international trade and e-commerce. Meanwhile, SKU is an alphanumeric code used by individual businesses for internal inventory tracking and management.
Yes, a product can have both a GTIN and an SKU.
The GTIN facilitates global identification and universal product tracking, while the SKU helps the business manage its inventory more effectively.
GTIN is crucial in e-commerce for ensuring products are globally identifiable and searchable across various online platforms. It standardised product listings, making it easier for customers to locate products and for businesses to manage their online sales.
To obtain a GTIN, register with the global standards organisation GS1. This process involves applying for a company prefix, after which you can assign unique GTINs to your products based on that prefix.
Absolutely. Businesses can create and customise their own SKU system to suit their specific inventory needs. This system can include details like product type, size, colour, or other relevant attributes, providing a tailored approach to inventory management.
GTINs are not typically required for products sold exclusively in local or domestic markets. They become important when selling through international channels or large e-commerce platforms requiring standardised global identifiers.
SKUs enhance inventory management by providing detailed insights into stock levels, product variants, and sales trends. They allow businesses to track and analyse their inventory precisely, leading to better stock control, order fulfilment, and sales strategy development.
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