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How to Create and Use Barcodes for Inventory Management

Posted by ThomasLast Updated December 13th, 2022
— 9 minutes reading

Over the past 11 years we’ve spoken with a lot of small businesses. And one of the biggest easy wins for us has always been teaching them how to create barcodes.

If you’re interested in a more in-depth look at how you can get started barcoding your small business be sure to checkout our Ultimate Barcoding Guide. It covers everything in this article and more!

This post will cover three major subjects:

  1. Reading barcodes
  2. How to create your own barcodes for internal use
  3. Creating GS1 registered barcodes for use at other retailers

Most of our customers haven’t made barcodes themselves, but they have seen them in retail stores. They take an item off the shelf, bring it up to the counter, the clerk scans it in — beep! — and instantly the computer is populated with the name and price of that item. This common experience can cause the misconception that the barcode itself actually had all of that information embedded within it.

However, 1D barcodes (a.k.a. one-dimensional or linear barcodes) are really just a series of vertical lines in varying widths. These barcodes, commonly used at European and North American retailers , don’t actually store a lot of information about products.

What is a barcode?

When a barcode is scanned, the string of vertical lines are interpreted by the computer and then output as text.

The point-of-sale system can recognize that string of numbers and will know to bring up certain details such as product name and price.

How to create barcodes #1:
The scanner reads the line spacing and width in the barcode and interprets the data into numbers/letters.
How to create barcodes #2:
The computer associates the numbers/letters encoded into the barcode with a product number.
How to create barcodes #3:
If your using inventory software like inFlow, the item information will pop up such as description, price, etc. when you scan a barcode.

That relationship between the barcode and that item had to be established beforehand. The barcodes were generated either by the business itself, or in concert with an organization known as GS1, which licenses barcodes to companies all around the world.

Types of barcodes

The types of barcodes you’ll see aren’t all the same; different barcodes will use different symbology. That symbology will determine the number of characters it can include, and what specific set of characters it can display. Codes like UPC-A (12 digits) or EAN-13 (13 digits) are widely used in retail, and you’ll often see Code 128 (which can display all 128 ASCII characters) represent the tracking codes on packages.

We put together this handy little guide for anyone starting out in barcoding. It covers some of the most widely used barcoding acronyms you’ll come across, so be sure to check it out.

Option 1: How to create barcodes by yourself

Making your own barcodes isn’t that hard to do. It’s also a great option if you just need barcodes for internal uses like asset tracking. 

First you’ll need a barcode generator, which can make barcodes that you can print out. Or you can use a barcode font, like our handy dandy inFlow Code 39 font, so that you can write your own barcodes in a program like Microsoft Word.

It’s up to you how to break down the actual barcodes, but you’ll probably want to build in a hierarchy so that you can see, at a glance, what kind of product a barcode is for.

The UPC-A symbology gives you 12 total digits, but only the first 11 digits contain message data. The 12th digit is called the “check digit”. It’s function is to verify the barcode has been read properly. If you’re generating your own codes manually, you can create a check digit with a bit of math.

Example of how you to create barcodes using an excel instead of an inventory management system.

That’s the most basic break down of a UPC-A barcode, but you can also do more advanced stuff by breaking down the other 11 digits into sub-categories. That way you can glean a lot more information about a product, even if you only have the 12-digit code. Here’s a quick example of what an Archon Optical barcode for Ghost glasses could look like:

How to create barcodes that can be used externally:  Order custom UPCs from GS1 which are made up of 12 digits. In the example of the ghost glasses the first 6 digits stands for the product type. The following 4 digits would be product name. The number after that would stand for either polarized or non polarized and the final number is the check digit.

In the above example we used numbers only but it’s important to keep in mind that you can have barcodes with other characters, and not all barcodes need check digits. The check digit is an error checking feature of certain barcode symbologies such as UPCs. While other symbologies such as CODE39 or CODE128 don’t use them at all.

Once you have generated your actual barcodes, you’ll want to print them out with a label printer so that you can physically attach them to your products. We’ve had success with the DYMO LabelWriter 450, but there are many other choices out there.

You’ll also want to choose a barcode scanner. You can find scanners for under $100 in both wired and wireless versions. Wired scanners are useful if you’re scanning at a fixed location, and you don’t want to worry about battery life. For warehouse work the best choice is a wireless scanner which allows you to walk through different aisles.

Once you’ve generated barcodes and stuck them on products, it’s time to tie those barcodes to product names in the inventory or point-of-sale (POS) system you’re using. Inventory software like inFlow Cloud will have specific fields for you to scan barcodes in. Now instead of typing a name or item number into the computer you can just scan the barcode instead.

You can accomplish this for a few hundred dollars, depending on the software and hardware you end up choosing. The key thing to remember here is that the equipment will be yours, and the barcodes that you create won’t have any extra fees associated with them. The caveat is that you probably can’t use these custom barcodes at other retailers. But that’s why we also cover Option 2. 

Option 2: How to create barcodes with GS1

If your long-term plan is to sell your own products in other stores that use different point-of-sale systems, then you’ll want to make sure your barcodes are created and registered with GS1. These GS1 registered barcodes are a must for anyone looking to sell products at large retailers or Amazon. In recent years Amazon has been cracking down on products sold on their site. They now require all listed products without the Amazon GTIN exemption to have a GS1 registered barcode. Setting theses up won’t take as much personal know-how and software, but it is a greater financial investment. Let’s take another look at the Universal Product Code (UPC).

As we covered earlier, a standard UPC-A barcode has 12 digits in total. When you register a barcode with GS1, there are different tiers you can purchase based on capacity (i.e., how many of your products will need barcodes). 

The most cost effective tier is a GS1 US GTIN, which is $30 for one barcode, with no renewal fee. This is a good option for businesses that have just a handful of products, but there are a few categories of products that aren’t eligible, so make sure to read the GS1 US GTIN page in full before purchasing.

If you need more than 9 barcodes for your products, you’re better off purchasing a company prefix from GS1.   Company prefixes start at $250 for 10 barcodes (as of 2021), and scale up to 100,000 or more. Each company prefix also has an annual renewal fee. For the full list of prices, head to the GS1 US Company Prefix page. But for now, here’s a breakdown of what barcodes look like at different tiers:

A barcode created with a six-digit company prefix can have 100,000 possible products; a barcode with a seven-digit company prefix can have 10,000 possible products.

With officially registered barcodes, you will still have to generate the barcodes yourself, but you have fewer actual digits to play with. Once you’ve registered a prefix with GS1, you’ll have access to the GS1 US Data Hub | Product (yes, the name is a mouthful). That online tool will help you to generate and track all of the barcodes in your business. The barcodes you create with that tool will all be registered, which makes them eligible to be used at other businesses.

Depending on where you’re located you’ll need to register a specific type of barcode with GS1. For example if you were located in India you would register a Goods and Services Tax Identification Number (GSTIN) which is 15 digits long. North America uses the 12 digit long UPC and Europe usually deals with the European Article Number (EAN), which is a modified UPC.

As for printing: you can export the barcodes from the Data Hub for printing labels out yourself. Although some people prefer to send the image files to a registered GS1 service provider. They can help you design and print the barcodes for use on packaging or boxes, if you’d like something more than just a simple label.

Wrapping up

Still wondering whether you should create your own barcodes or use GS1 registered ones? It really boils down to whether or not you want to sell your product at stores other than your own.

Creating your own custom codes is pretty simple and cheap. All you need is a computer, some software or font packs, a scanner, and a label printer. Once you have your setup, the costs are about the same whether you choose to create 100 barcodes or 1000. It just becomes more of a time investment on your part. This is a great option for smaller shops, or if you just need barcodes to help manage inventory.

But if you want to enable other businesses (especially larger big box stores) to stock your product, you’ll need to go the registered route with GS1. That means you’ll have to pay GS1 for the registration and annual renewal fees. If you just need a single barcode you could go the single GTIN route and avoid the renewal fee. You’ll still have to make the actual business connections yourself in order to sell your products at other stores, but at least you’ll have the logistic work in place when you have registered codes.

The links in this article point at US-specific resources, but you’ll be glad to hear there are GS1 offices all over the world. So if you’re looking to start barcoding your business and prepare for growth, your local GS1 office is a great place to start.

Generate barcodes in inFlow

After speaking with hundreds of customers about barcoding, we’ve realized that one of the most valuable things we can show them is how to create barcodes.

That’s why we’ve built that feature right into inFlow Cloud. You can fill in the barcode fields yourself or have inFlow Cloud automatically generate unique barcodes for your products. Also, you have choices about how to print the barcodes. You can print directly to DYMO printers or create shelf labels to scan.

If you’d like to learn more about how inFlow can create unique barcodes and labels, check out this video: 

How to Generate and Print Barcodes
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