So sorry, more UPC 101: GS1 vs Resellers, as I understand it
Recently someone said to me “Why do I have to pay an “annual membership fee” to belong to the GS1? Why wouldn’t I go with one of these website’s I see offering “real” GS1 UPC’s for as low as $89.00 or lower!?” Here is what I have to say about that…
There is only organization that can issue “real” UPC’s specific for your company as the manufacturer, that is recognized by the GS1. I’m not sure why you have to pay your moola every year, but you just do. If you do not, your company prefix (and therefore your UPC’s) will be null and void. The services they offer (and I’m just reading the stuff they gave me, I’m not saying it’s right or wrong… as a matter of fact, I REALLY wish I didn’t have to pay this every year) but included in your annual membership to the GS1 is:
Unlimited tech support, UPC’s, a bunch of “supply chain” management stuff that I don’t understand yet because I’m not there, newsletters, access to the GS1 “online membership center” with resources for managing your supply chain practices, access to supply chain education opportunities and access to (with more $) the annual “U Connect” conference, which is the “one conference to learn about the supply chain best practices and business process solutions from successful companies of the GS1 US. This year speakers include J. Alexander Douglas of Coca-Cola North America, Craig Herkert with Wal-Mart International division and Randy Mott of Hewlett-Packard” (there are a bunch more, but this post is getting too long already… Sorry!)
Okay, that’s some of the stuff I got when I joined. I’m not at the point in my biz where I see the value in all this yet, but I do know if I ever want to run with the big dogs, I don’t have a choice… I need my GS1 Company prefix to make my UPC codes or I don’t get in to the major retailers period. I’m not agreeing with it, it’s just one of those necessary evils and expenses of being a manufacturer so plan for it. It’s not going away and it’s not getting any cheaper.
About the cheap UPC offers online, I’m no expert but this is my understanding of the UPC reseller thing. It is possible that the cheap UPC offer may be the best decision for some product developers, inventors, and manufacturers so I’ll try to show both sides. In my case, going with the GS1 is my only choice, but it might not be for everyone.
Here’s how the reseller/cheaper UPC thing works. A UPC is made up of a 10 digit company prefix (which is yours and only yours) then you’ve got the rest (it is a little more involved then that, but for the purpose of this resell issue that’s all we need to know). Resellers are most of the time members themselves of the GS1 so you are using their 10 digit company prefix. They then can make tons of UPC’s and resell them. When you buy wholesale UPC’s, they are “real” GS1 UPC numbers, but they will not represent you as the manufacturer in the eyes of the GS1 or the big retailers. I don’t think there is anything illegal about the practice what-so-ever, BUT I don’t think you’ll get very far with your bigger players when you use them.
A lot of these UPC websites are very careful in their wording, so just know what they are talking about. I’ll give you some examples of claims made and then translate.
“XYZ company barcodes are UPC codes and they originate with the only legal source, GS1 (formerly know as the Uniform Code Council or UCC).”
Yes, UPC codes are only issued from the GS1, so they are “real”.
“XYZ Company’s UPC code is unique and GUARANTEED to be authentic. There is no danger of cross-over, duplication, or expiration of your barcodes.”
Yes, if it is issued through the GS1, there is no chance of duplication, however I am not sure how they can say there is no danger of expiration because as soon as that company stops paying it’s annual membership or goes out of business the company prefix and every UPC code bought with that company prefix will be null and void.
“With XYZ Company you OWN your UPC barcode outright. It can be registered in your name and re-issued by you for future products once you have sold out or discontinued your current product.”
Yes you OWN the barcode because you bought it from a reseller. As far as “registered”… they don’t say it’s registered with the GS1.
“With XYZ Company we even have a certificate available stating that the UPC numbers have been assigned by us to you and only you.”
What is “a certificate”? And okay, so it’s a piece of paper saying “the UPC numbers have been assigned by us to you and only you”. That’s probably EXACTLY what the certificate says. I have a certificate saying I’m “Mother of the Year” from my 2 year old, but that doesn’t hold much water against my best friends… they too think they are mother of the year. Unless you have THE “GS1 Company Prefix Certificate”, it’s about as good as my “Mother of the Year”… Which is pretty fantastic if you ask me!!! BUT Wal-mart cares as much about my Mother of Year as they do about XYZ’s assignment certificate. I have actually heard of a large retailer asking for your “Company Prefix Certificate” and if you don’t have it, you’re out of luck.
Today’s supply chain management and EDI stuff is so complicated and precise, if you’re not playing by the rules, you can’t play. Another thing to consider is let’s say I was a t-shirt manufacturer and I had Small, Medium and Large in 3 colors… at $89.00 a pop from a reseller, that’s 9 UPC’s I need. Not a great bargain now. One more thing to be aware of when going with a reseller is that sometimes these resellers go out of business and when they do, YOUR barcode is no longer valid and you have to start all over again.
Having said ALL THAT, you can actually go your entire product life cycle without having UPC codes. Online, specialty stores, local boutiques, no problem. You will run into trouble as soon as you hit the big time and since I WILL be hitting the big time, this is a decision I have made for my business.
I would like to reiterate, there are times when it might be appropriate and even the “right” thing to do for some people. For example if you only need 1 UPC because you want to get an item into a small individual retailer or an internet company, this probably would be the best way to go. Just make sure you are aware of the limitations and potential problems. MY choice is to go with the GS1 as it is required for my market. I have spoken with a reprehensive from the GS1 in gathering the above information (I have more if you’re interested) so if there is something you are not clear on, please email anytime! That’s all for today class!
Leslie Haywood, Founder and President of Charmed Life Products, Inventor of Grill Charms™ www.grillcharms.com
