Step up to the bar: The basics of bar codes

February 28, 2011 - Tags: Products Managing Technology Sales

Pick up any packaged product and spot the familiar rectangle made up of black lines on white space with a series of numbers underneath. We all know these as bar codes, but what do they do and how can they be of use to your business?

If you wish to sell your products through a large retailer, it may be time for a bar coding system. Also known as uniform product codes or UPC symbols, bar codes allow both you and the retailer to track inventory by linking information through the chain of production, warehousing, distribution, sales and service. But even as only an internal measure, this can be an efficient way to control your stock. Using this identification tool to capture data may be a big change in how you do business, but the investment could pay off quickly with increased efficiency and accuracy.

You may create your own bar codes for a strictly internal tracking system without fulfilling any external requirements. However, if your products are part of a larger retailing process, you will want to comply with GS1 standards. As an international standards organization that provides bar codes used and recognized around the world, GS1 ensures that your numbers are unique to your business. To obtain bar codes from GS1, you must be a member.

The costs of having a bar coding system need not be extensive. You can choose a system as simple as your needs. If work is done faster and with far fewer errors, it may be worth investing in the necessary components:

  • GS1 membership
  • Software (database of information)
  • Hardware (printer, labels, scanning equipment)

You may use each code, either pre-printed on the packaging or as a sticker, on one product only. No prices or product details are in the code itself, but when scanned, it is sent to the store's main point-of-sale where the information is retrieved and applied.

While machines read the lines and spaces of a bar code, you can also “read” bar codes if you know how they are constructed. To read a bar code in Canada:

  • Read the twelve digits that make up the uniform product code number.
  • The first six digits identify the manufacturer.
  • The next five identify the item.
  • The check digit is last, to ensure that the item scans properly.

For more information, the Office of Consumer Affairs has a Consumer Trends Report with details about the use of bar code technology in the retail sector. To find more information on inventory control, see our section on Supply chain management.


Posted by on March 29, 2011
Hi Michael,

Barcodes can be given free of charge, but cannot be sold. You can take the company up on their offer as long as they are not charging you a fee for the use of their extra barcodes.

You may want to keep in mind that the barcode prefix (the first 6 - 9 digits) identify the manufacturer, so, in your case, the code will identify the original company as the manufacturer. This could be a problem if you are dealing with retailers who use the prefix to trace the manufacturer of the products they carry.

Best of luck moving forward with your business!
Posted by Michael on March 24, 2011
I have an affiliation with another company located in Canada who possess an excess number of barcodes, which they will never use. They have graciously offered to help us by allowing us to use a number of their barcodes(on an exclusive basis) as we grow. The entry level cost for small manufacturers wanting barcodes thru GS 1 is very prohibitive so I would like to know if there is any reason (legal or otherwise) that we could NOT take them up on their offer?

Thank you
Posted by on March 23, 2011
Hi Chad,

You do not need a bar code to sell a product, but many retailers use price scanners at the checkout or use bar codes as an inventory management tool. You will want to find out if your potential customers require products to be labelled with bar codes.

You can learn more by visiting the GS1 Canada website. If you decide to use a bar code, you can purchase a unique code from GS1.

Best of luck with your calendar!
Posted by chad on March 23, 2011
i wanted to know what i had to do exactly to get a barcode for a possible 'art calendar' . im not sure on what to do but i have no other products but this calendar. do i need a barcode to sell it in stores? barcodes for dummies lol
Posted by on March 10, 2011
Hi Fernando,

GS1 Canada provides information on bar codes and traceability service options.
Posted by Fernando on March 7, 2011
I interesting in gather information about the system to use in a small courier company that I am planning to open in the Central Fraser
Valley, would you please help me with this matter

Thank you.
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