EAN Barcodes Explained!

Last week I received an email from a blog reader with some questions about EAN codes, and instead of answering her and including the question in our weekly Q&A post, I instead decided to create a full-detail blog post for it.

Here is the email that Nicki sent to me:

Hi Andrew

I just wondered whether you could provide me with a bit of guidance on EAN codes please?

I am looking to import a product (with different sizes) from China to sell on eBay and to sell to small retailers in my local area.

Would I need an EAN code to do this? If so, where is the best place to purchase these codes or would the manufacturer already have these unique bar codes to put on the products at my request?

Please could you advise what the costs implications are for buying EAN codes and any pros and cons for having/not having the codes on the imported products?

I have not yet decided whether I am going to brand the products. If I do, am I more likely to require an EAN code for each product?

Any advice on this would be greatly appreciated.

Many thanks,
Nicki

So let’s now cover Nicki’s questions (and more!).

First of all – what are EAN codes and how do they work?

A simple explanation is that EANs are unique identifiers (barcodes) used to identify new, branded products sold at retail.

The EAN, which originally stood for European Article Number but is now referred to as International Article Number, is a 13 digit number found below the barcode:

This is the standard product identifier used in Europe and is recognised by nearly all retailers (after all, the whole point of the system is lost if it’s not adopted by all sellers). Pretty much any company or marketplace that you can think of will use these barcodes.

There is sometimes a bit of confusion between EAN and UPC (Universal Product Code). The answer is that they are both Global Trade Item Numbers (GTINs), with the difference being UPCs are one digit shorter (12) and are more commonly used in the United States and Canada.

If you do want to learn more about all of this, please take a look at the article I did on eBay’s new product identifiers, as this was all covered then.

Do you need EAN codes?

Now that you know what they are and how they’re used, the question is whether or not you need them for your business?

And really that depends on what and where you’re selling…

You will need EAN codes for your products if:

• You sell on Amazon

It’s a requirement that your products have their own unique identifiers/barcodes if you want to sell on Amazon.

Of course this only applies when you want to sell your own, unique products, i.e. when you’re the manufacturer. You will not need one if you’re simply offering an iPad for sale, as in that case there will already be a code in place for that specific item.

Let me quickly note, as I know I am going to get emails about this particular point – if you get a factory to manufacture a product for you, which you then import in to the UK for re-sale, you are the manufacturer and it is your responsibility to ensure it is properly labelled.

It really is as simple as that, so please don’t try to get around this with a technicality!

• You sell to bricks and mortar stores

As mentioned before, EAN are the retail standard barcodes, so if you sell your products to B&M stores, you’ll need these codes as they’re used for inventory and POS systems.

Where to purchase EAN codes?

By now you should be clear on whether or not you need EAN codes, in Nicki’s case that’s a yes as she plans to sell to local stores.

The question remaining is where do you buy these codes from? And there are two answers really.

Firstly you have the official option – directly from GS1 UK:

https://www.gs1uk.org/

GS1 UK are the UK version (obviously) of the global GS1 organisation, and they are the ones who actually create and manage these barcodes.

To get barcodes directly from GS1, you need to join and become a member, for which you need to pay a joining fee and then an annual license fee. The joining fee is a one-off charge whereas the annual license fee is of course charged every year. In return for these fees you get an allocation of EAN codes.

The cost of this depends on your annual turnover, but as the lowest level is up to £500,000 a year, we’ll use that for our calculations:

• Turnover: Up to £0.5m
• Annual license fee: £119
• Joining fee: £109
• Allocation: Up to 1,000 numbers

The fees are both ex. VAT, so I will also add a separate calculation including VAT.

In total, the cost will be:

£228/£273.60 – Year 1

£119/£142.80 – Year 2 onwards

And using the full 1,000 allocation, that gives a cost per code of:

23p/27p – Year 1

12p/14p – Year 2 onwards

Pretty reasonable, right? After all, taking even the highest amount, what is 27p per code… nothing, especially on turnover up to half a million!

Yes, but what if you don’t need 1,000 codes? What if you only have one item that you sell on Amazon? Then the cost is £273.60 for the first year and £142.80 every year after. Suddenly it doesn’t seem so reasonable.

But what are the alternatives? After all this is the company that actually produces and manages these codes, it’s not as if you can go to a competitor.

And this is where the second (unofficial) buying option that I mentioned earlier comes into play – buying from resellers!

There are a huge number of these resellers online, as a quick search for “EAN barcode UK” will show:

BarCodesTalk.co.uk claim to have sold over 40,000,000 barcodes, “more than all of the other bar code resellers combined”, so they should be a good example for pricing.

The pricing on their site is in Euros, so I have converted to Pounds at a rate of 1.3:

As you can see the prices are very reasonable, with a single barcode costing just £3.85 and a hundred only £0.35 each.

I now also want to quickly compare this to the pricing of another unofficial reseller, Bay Demon, who I have actually recommended to people in the past who were looking for one or two codes and didn’t want to join GS1.

As you can see Bay Demon also have some excellent pricing, with a single barcode costing just £1.50! They are a little more expensive than Bar Codes Talk at higher quantities, but not by much, and I have had good experiences with Bay Demon in the past.

Plus remember that neither of these sellers charge a yearly or renewal fee, you only pay for your barcodes once and then you own them for life.

BUT, I am now brought to a very important question – are there any problems buying from these resellers?

Before I answer that question, I want to very quickly explain how they work. As we’ve already gone over, all of these barcodes originate from GS1 in the first place, so the ones you buy from these resellers were still bought from GS1, just in bulk for resale.

So they are not some illegal/incompatible code that you won’t be able to use, not at all! The issue with them is that it is now against GS1’s rules for these codes to be bought and resold.

Does this mean that you cannot use these resellers at all and your only option is to pay £100s of pounds to GS1? Well not quite…

I have been researching this in great detail so that I can pass on the best advice to my blog readers, but I actually want to quote George Laurer on the topic (the creator of UPC codes!) as I think he sums it up very nicely:

“In the past I have told everyone that the only place to obtain a legitimate U.P.C. number is from the GS1 US (formerly UCC).

Since then I learned that there are several places where one can obtain a subset of a U.P.C. number issued to another company. GS1 US considers it is against their rules and inappropriate for a company to purchase a U.P.C. number from them and then resell subsets of the number to other people.

However, the rules were not codified in their license agreement until August of 2002, and therefore, if a company sells a subset of a number they obtained prior to August 2002, there is little recourse available to GS1 US.

Several companies are now selling numbers. They are a good alternative to buying from GS1 US, however, please read before you buy”.

And really that mirrors my own thoughts. It certainly isn’t definite that buying from these resellers won’t cause any problems in the future (what if they sell your code to someone else, what if they sell you an already used code etc.) but there are of course huge advantages in terms of cost or if you only need a small number of barcodes.

I’ve offered my advice but ultimately it’s up to you with what you decide to do here.

How to use your EAN codes?

Once you have purchased and received your codes, you can then use them right away.

If you’re selling on Amazon or need them for eBay’s Product Identifiers, then this is incredibly simple – all you have to do is enter the code when you’re listing a product. You don’t need to attach it to or label the actual products.

If however you’re selling to local B&M stores, as Nicki is planning, then you do need to have the EAN code on the actual product or product packaging.

But don’t fear, this is actually a very simple process, and there are a few different options for how to go about it:

• Order labels from a printing company.

This is a very good option if you’re ordering just a few designs, but at very large volumes.

• Use a Dymo label printer.

This method is great if you have a number of different products as you can print labels as and when needed and don’t need to order in bulk. You can of course use any label printer, but in terms of pricing and speed I can happily recommend the Dymo Labelwriter 450 as we personally print hundreds of labels a day using this, without any problems.

• Get the codes printed directly to your product/product packaging in China.

This will only be a viable option if you’re getting an OEM order from China, which obviously means buying in real bulk.

From the 3 options, using a label printer is probably what I’d recommend as it’s simple, easy, reliable and actually quite cheap when you use compatible labels (as I always suggest).

Options 1 and 3 are good if you’re ordering in bulk, and between the two I’d probably suggest getting it done in China if possible, simply because it’s easier and will be more cost effective.

And I think that’s about it! We’ve covered what EAN codes are, who needs them and for what, where to buy them from, and finally how to actually use them.

If there is anything that I’ve missed out or something you’d like clarified further, then please don’t hesitate to post in the comments section below and I’ll personally get back to you in 24 hours, Monday to Friday.

Otherwise I’ll see you again on Wednesday, when I plan to post a quick guide on how to quickly and easily increase your sales for Christmas, while also improving your margins!

See you then!

All the best,
Andrew