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How Does a Barcode Inventory System Work?

Nearly half (46%) of businesses don’t have an inventory management system. For small businesses, this is a business killer.

Customers have higher expectations than ever before. If you’re not prepared to meet them, then you’re missing out on sales and loyal customers. Loyal customers buy more often and they spend more money.

It’s hard enough to manage inventory with so many supply chain issues. Don’t make it more difficult for yourself or your business.

You need to have a barcode inventory system that makes tracking items easy. It can become an indispensable part of your small business inventory system.

If you’re ready to take your small business up to the next level, read on to find out a barcode system for inventory works and how you can create one.

How Do Barcodes Work?

Barcodes are images with numbers and text. These are unique images for a product that allows you to track the quantity of a product in stock.

Barcodes get read by handheld barcode scanners and then sent to a digital inventory management system. The inventory management system then updates information in the database.

This happens when you receive a product and when you sell a product.

Barcodes contain two types of information. They have a UPC, which is a Universal Product Code. This tells you who the product manufacturer is.

The SKU is specific to your business. This is a number that contains information like the product size, retail price, color, style, and other information. You create SKUs for all of your products.

Barcodes used in inventory management systems are generally 1D barcodes. These are images that have a series of vertical lines with a number underneath them.

There are different standards of 1D barcodes. Which one you’ll use depends on the needs of your business.

EAN-13 and EAN-8 are commonly used barcodes. The main difference between them is the number of digits they have. EAN-13 has 13 digits, while EAN-8 uses eight digits.

Code 39 allows you to use letters and numbers in your barcodes. You can use this if your inventory system requires the need for more character types.

If your products are small, you’ll need to have a smaller barcode to fit on the packaging. EAN-8 would be a good choice.

What Is a Barcode Inventory System?

A barcode inventory system is a way to track items as they come through your business. You can also use barcodes to track items throughout the supply chain.

This gives you a clear idea of where your business stands at all times. You can make forecasts, know when to order more, and when it’s time to give up on a product that’s not selling.

The advantage of using barcodes is that they limit errors and save time. Let’s say that you’re using a manual tracking system for inventory.

This might work in the early stages of your business when you have few sales. As your business grows, you have more to handle.

You lose track of how many items are in stock and where they are, and you can mislabel an item on your manual tracking spreadsheet.

Barcode systems help you automate the inventory management process. There’s limited data entry work once your system gets set up. You can just scan and move on to the next thing.

This article explains how a simple inventory tracking app can streamline your inventory management processes.

Setting up a Barcode System for Inventory

Is a barcode system right for your business? If you manufacture and/or sell physical products, you will benefit from a barcode inventory management system.

The first step in setting up an inventory management system is to create SKUs for your products. Look at your inventory and decide what type of information is necessary to have listed in your SKUs.

Your next step is to select a barcode inventory system. It could be a barcode tracking app or a full-fledged system. You should consider features, integrations, and support when choosing your software.

If you have to manage inventory at several warehouses, your inventory system should let you do that.

For example, you may want to have an inventory management system that integrates with your accounting software or email systems.

Decide what type of barcode you want to use. Think about your product and business needs. You may just need something simple like EAN-8.

You’ll create your barcodes using a barcode generator. Your inventory barcode system may have a feature that lets you create barcodes. If it doesn’t there are plenty of online resources that let you create barcodes without a hassle.

Start With Manual Inventory
It’s important to start your inventory system with the right information. If you’ve been loosely tracking inventory, you’ll want to tighten up your ship a bit.

Take a manual inventory to get accurate numbers and enter them into your system.

Train Your Employees
The barcode system for inventory is a tool to help you automate and maintain accurate inventory. Like any tool, it’s only as good as the people who use it.

If your employees forget to scan a shipment or a couple of sales, then your inventory numbers are off. That’s why it’s essential to train your employees and show them how to use the barcode scanner and when.

Demonstrate how it helps your business and their work so they’re more likely to use it.

Start Using a Barcode Inventory System

What simple system has the power to completely transform how you do business? A barcode inventory system.

It takes a lot of upfront work. Once it’s running, you have a small business inventory system that lets you automate tasks, save time, and keep customers happy.

It’s a winning formula for a growing business. Be sure to check out the other articles on this site for more helpful business tips.