By Gina Obert on October 06, 2021

How Do Barcodes Benefit Small Business Retailers?

We’ve all seen hundreds and thousands of barcodes as consumers. But even though they’re prominent in the retail experience, we’ve likely never thought of what makes up a barcode in the first place.

As a small business retailer, it’s valuable to get familiar with the basics — and this includes diving into barcodes!

What is a Barcode?

To break it down, a barcode is an image made up of black bars and white spaces. Barcodes can also contain other identifiers such as numbers, letters, and characters. The combination on each barcode is a machine-readable representation of data, but we’ll cover that later.

Barcodes were created to reduce human error. There’s a lot of information behind a product, and barcoding it helps with inventory tracking, transportation, product identification, organization, and management.

Think of a barcode as a unique and universal identifier. Every product has its own special barcode, and no two different products will have the same barcode. For example, two cans of 12-ounce Coca-Cola will always have the same barcode whether they’re in a major grocery store in California or a corner bodega in New York. On the other hand, those 12-ounce cans of Coca-Cola will have a different barcode than 12-ounce cans of Diet Coca-Cola. Since these codes are universal, you will not need to update your inventory for existing products even if you purchase them from a new supplier.

How Does a Barcode Work?

As a retailer, your products will more than likely contain a UPC, or Universal Product Code. This is the most common product code standardized in the US, containing 12 digits from left to right. Different parts of this code identify a general or specific product category, the product’s manufacturer, and the product itself. 

This code is pre-assigned, so when you order products from a vendor for your retail shop, they’ll have a set barcode printed or attached to them. (The exception to this is if you purchase unique, individually-made products from small local businesses. These may not be barcoded.)

UPC barcodes are one-dimensional, so they can be scanned at your point of sale with a handheld or stationary 1D scanner. The scanner uses a laser to read the pattern of black and white bars on the barcode, sending the information to your point of sale in binary code (0s and 1s).

Sending barcode information to your point of sale is necessary when adding products to inventory, managing stock counts, and checking out customers. Without barcodes, tracking and ringing up products would be at the hands of the retailer, making inventory management nearly impossible.

The Benefit of Barcodes for Retailers

Managing your small business without barcodes may sound like a nightmare, so we can all feel comfortable knowing that they won’t be going anywhere! Barcodes are universally used to track manufacturers and products, but they’re beneficial to your internal tracking as well.

As mentioned, if your small business sells unique or made-to-order products that don’t come from a large manufacturer, consider a barcode and label printer for your point of sale system. Some solutions even come with software integrations that allow you to customize labels. Printing your own barcodes for these items is the best way to streamline inventory management.

If you have any questions about barcoding your retail products, or you want to learn more about CAP Retail by POS Nation, contact our team at


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