It's the age of eCommerce, and many companies are selling on an online marketplace (or on a few, for that matter). However, there's a lot to get your head around before you can reap the full rewards. For instance, do you know anything about the role of barcodes in eCommerce?
We spoke to Lorna Beament, an Industry Engagement Manager at GS1 with tons of marketplace experience from Mothercare, Early Learning Centre, Boohoo.com and Dune London. Her role at GS1 is to engage with stakeholders that sit within the marketplace landscape and discover ways to tackle their issues and enable friction free trading.
Who is GS1?
GS1 is an international, non-profit association that develops global standards aimed at improving supply chain visibility and efficiency. The organisation was first launched in 1974 and it is now the most widely used supply chain standards system in the world. They have around 112 offices across 150 countries and serve more than 2 million companies spanning across 25 sectors.
What is a barcode?
A barcode is a visual representation of the number that sits underneath it, which is called the Global Trade Identity Number (GTIN). Over time barcodes are becoming more digital and we are beginning to need them as a way of identifying products in the same way that they are required in the retail supply chain. As such, selling on an online marketplace increasingly requires the use of GTINs. For inatance, Amazon verifies all barcodes against the GS1 database when new products are added.
A GS1 GTIN is generally made of 4 components:
- A company prefix – this is your GS1 company ID for creating barcodes and other product identifiers. The length of the prefix depends on how many numbers are required.
- A country prefix – the United Kingdom is 500 to 509.
- A product code – this uniquely identifies a product type. It tends to be 3 digits long.
- A check digit – this is used to make sure that the GTIN is correctly compositioned. It can be worked out manually by using the moldulo-10 algorithm.
Where can I get a barcode from?
To sell your product, more often than not you are going to need a barcode. A quick Google search is enough to show you that there are plenty of places you can achieve this, starting from as little as £1. With so much market competition, why should you choose GS1?
First and foremost, the uniqueness of all GS1 barcodes is guaranteed as each product is assigned its own 12-digit GTIN. Consequently, this means that once a product is barcoded it can be sold via any retailer in any country without the need to re-label it according to the countries requirements. Likewise, having a unique GTIN identifier helps to establish the digital value of products. To verify this, you’ll receive an official GS1 certificate, which will give you peace of mind that your barcodes are exclusively yours.
The cost of a GS1 barcode depends on your businesses annual turnover. Whilst GS1 are looking to make their services more accessible for smaller businesses, they are a not-for-profit organisation. The lowest membership fee is applicable to business whose annual turnover is up to £0.5million. In this case their annual licence fee is £119 which allows you to create up to 1000 barcode numbers. This works out as little as 0.12p per barcode. At the other end of the spectrum, businesses with a turnover in excess of £1 billion are required to pay an annual licence fee of £3,200 which allows them to create up to 100,000 barcode numbers. This works out at approximately £0.03p per barcode.
Why do you need a barcode?
Technically, there is no requirement that products must have barcodes unless you’re selling at the wholesale level or you sell to large retailers. Therefore, you’re probably wondering – do I really need one or is it just an additional cost to my business?
Well, there are many needs and uses of barcodes so it’s worth weighing up all the benefits.
Firstly, barcodes can help any online marketplace manage its catalogue – it lets the retailers know which products are yours. Automating the inventory process saves time and reduces the risk of human error as no workers are required to take a physical inventory. Having the wrong information in your supply chain can be catastrophic for your business, so barcodes take some of the risk out of this process. Similarly, by having a unique GS1 GTIM marketplaces are in a better position to remove listings that are duplicated, counterfeit or have low or no GMV. Piracy and counterfeiting are becoming more and more common so its important to aid its prevention in any way possible.
Secondly, and following on from that, using barcodes improves customer experience. By removing all of these spammy listings on an online marketplace, it’s much easier and quicker to find what you’re looking for. The noise on crowded marketplaces is completely reduced. A good example of this is phone listings. As I’m sure many of you know, if you do a search on eBay for ‘iPhone’ you will be inundated with cases, screen protectors, headphones etc. and rarely an actual iPhone, which is the product we’re looking for. Barcodes will therefore allow searches to become more relevant as phone accessories can be filtered out of these search results. This results in a greater sense of trust, longer visits and ultimately, more sales.
How do you create a barcode?
Through GS1’s system, the creation of barcodes is intended to be simple and quick. The programme they use, called My Numberbank, requires 7 pieces of information in order to create a barcode:
- GTIN – the products unique global identifier from GS1.
- Name – The average length of a product name is 47 characters, which is approximately 8 words. This differs slightly from eBay, who allow 80 characters, and Amazon, who allow 200 characters. It’s important to ensure that the correct keywords are mentioned so it gets shown under the right search results. The format we usually recommend is ‘brand + features + product type + details’.
- Brand – this is usually the main way in which people identify the product that they are looking for.
- Sub-Brand – a product that is affiliated with a parent brand but has its own name e.g. Diet Coke
- Description – this is the long description for your product, it is a marketing message intended for customers.
- Web Link – a URL link to your product.
- MPN – letters and numbers given to a part by a manufacturer to help identify who a specific part is made by.
- SKU – internal numbering system used to keep track of different Stock Keeping Units.
When do you need a new GTIN?
GTINs are used as product identifiers, so therefore it follows that if you make changes to your product you may need a new GTIN. Generally a new GTIN is required in the following circumstances:
- A consumer of trading partner is expected to distinguish the changed product from the previous or current product
- For example – the recently introduced sugar tax saw a lot of manufacturers removing sugar from their products. These new products would require a new GTIN to let the customer know that the product is different as the sugar has been removed.
- Minor artwork changes don’t require a new GTIN but if youre creating a new design for a limited amount of time you may need a new GTIN so when the supply chain is over you can remove it from the chain immediately.
- There is a regulatory or liability disclosure requirement to the consumer or trading partner
- For example – if you make recipe changes to a product so that is now vegan you need to let the customer know that it has satisfied the regulations
- There is a substantial impact to the supply chain e.g. how the product is shipped, stored, received
- For example – a change of more than 20% to the physical dimension of the product will require a new GTIN as the warehouses that store the products and shops that sell the product will need to know.
Still have questions about selling on an online marketplace?
We hope that this blog proves useful to you. However, we know that selling on an online marketplace can throw up plenty of challenges along the way. If you have further queries, or simply fancy a chat about the latest developments, why not book in for a consultation call with our resident experts. We'd love to chat.