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Product labeling seems innocuous. You have a product, that product has a barcode … and that’s about as far as the labeling conversation usually goes. But in the world of Amazon, the product label and accompanying Global Trade Item Number (GTIN) are the atomic units that power the leviathan that is Amazon’s marketplace.

Though product labels may seem mundane, how you label your products impacts everything from your production line to vendor control. 

This leaves you with two paths—make the correct labeling decisions and spend your time on other (frankly more interesting) aspects of growing your business, or ignore the correct strategies and face additional fees, slow or improper inventory receiving, and reduced control over your supply chain. 

Whether you’re just navigating the early stages of launching on Amazon, or you’re an Amazon veteran who never stopped to consider your options, we’d like to help you live on the path of labeling sans headaches.

 

Why Does Amazon Care So Much About Labels?

To understand why so many elements of your business on Amazon are impacted by your product labels, it’s important to realize that Amazon has a massive data set of products. 

By various estimates, this ranges anywhere from 120 million to over 350 million products, depending on which third-party source you favor. As with any large data set, those products require some unique identifier so Amazon can maintain a marketplace that’s nonduplicative in its assortment (or at least attempt to do so with varying degrees of success).

For products that have barcodes, this unique identifier is the GTIN. Most North America-based sellers use a variant of the GTIN known as a Universal Product Code (UPC), a 12-digit numeric string assigned to that particular product. Europe has their own variant known as the European Article Number (EAN). 

This whole database of various barcodes is overseen by an international organization known as the GS1, which ensures the interoperability of product identifiers in supply chains across the world. They’re also the organization from which you purchase new barcodes and register the product code prefix associated with your company. More on this later.

On Amazon’s side, every product in their catalog also has an Amazon-specific unique product identifier known as the Amazon Standard Identification Number (ASIN). When a product that doesn’t yet exist within Amazon’s marketplace is added, Amazon takes in the product’s GTIN (UPC, EAN, etc.) and then assigns it an ASIN. Voila—you’ve created yet another product, within the millions already on Amazon.

There’s a little more nuance to this process that you can read about in depth (along with examples of how this looks on a barcode) in our guide to updating UPCs, but that’s essentially the gist of it. And now that you have a GTIN and an ASIN, it’s time to decide how you actually label your product.

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The Two FBA Labeling Methods

Once your GTIN is registered to a given ASIN, you’re set to begin sending product to Fulfillment by Amazon (FBA) fulfillment centers with that particular barcode on it. 

Here’s where you need to make the key decision on how you label your products:

  1. Use manufacturer barcodes
    OR
  2. Use Amazon labels

Using manufacturer barcodes means you won’t be using a separate Amazon-generated barcode for your product. Instead, you’ll just use the GTIN and associated barcode already on your product.

On the other hand, using Amazon labels means you’ll use a barcode that Amazon generates for your product. Rather than featuring the product’s GTIN on the barcode, it will feature a Fulfillment Network Stock Keeping Unit (FNSKU). 

The FNSKU is a SKU-specific numeric string that Amazon assigns upon SKU creation, provided the SKU is set to receive Amazon-labeled product. It takes the format of “X00,” followed by a 7-digit alphanumeric string (e.g. X00123ABCD). Amazon will scan and use that FNSKU and associated barcode from the moment it arrives at a fulfillment center, all the way until the product is shipped to the end consumer.

Product Labelling

 

Sometimes You Can’t Choose Your Labeling Method

Before we break down the pros and cons for each, a brief note that certain products won’t afford you the luxury of choosing between the two labeling methods. 

Products must fulfill all of the below requirements for them to be eligible for Manufacturer Barcodes: 

  1. Be in new condition
  2. Have only one scannable barcode that is matched to one ASIN in the Amazon catalog
  3. Have no expiration date
  4. Not be consumable or topical products such as skin creams, shampoos, or cosmetics
  5. Not be dangerous goods

Products that don’t fall into the above eligibility categories technically are required to use Amazon labels, though Amazon enforcement of this is inconsistent. Conversely, Amazon will occasionally notify you that a given product must start using Amazon labels rather than manufacturer barcodes even if it does fulfill the above requirements, as they can do so at their sole discretion.

 

Manufacturer Barcodes Versus Amazon Labels: Pros and Cons

The benefits and drawbacks of using one labeling type versus the other aren’t extensive, but they are meaningful.

 

Manufacturer Barcode Benefits

  • No additional labeling requirement - This is the main reason why the majority of established sellers use manufacturer barcodes rather than Amazon labels. Assuming your products already have barcodes on the packaging that feature their respective GTIN, you don’t need to apply a different label as prep on your end, or pay Amazon to do it for you. The former is laborious, and the latter is a margin-killing $0.20-per-unit fee.
  • Uniformity throughout your supply chain - Unique prep requirements that depend on a product’s ultimate sales channel are a certain logistical headache. Using manufacturer barcode labeling ensures that products manufactured, packaged, and prepped for your other non-Amazon channels are labeled the same as products destined for FBA warehouses.

 

Amazon Labels Benefits

  • No commingled inventory - If a given ASIN has multiple sellers for that product, and all sellers are using manufacturer barcodes as labels for that product, Amazon does not make a distinction about whose inventory belongs to which seller once it’s received at their warehouse. In Amazon parlance, this is “commingled” inventory. This creates problems if product quality is inconsistent between sellers. Amazon labels avoid this by using FNSKUs that are unique to a given seller, thus creating a linkage between that particular unit and the seller responsible for sourcing and shipping it.
  • More granular inventory tracking - Using Amazon labels allows you to track various groupings of inventory for the same ASIN across multiple SKUs and FNSKUs, rather than having all inventory for all SKUs on a particular ASIN lumped into a single shared quantity. Common use cases for this would be if you wanted to tie inventory in your account to different production batches or packaging runs for more granular tracking and management.

Note that the drawbacks of each of the above methods are essentially the inverse of the benefits. 

Manufacturer barcodes require you to commingle your inventory and don’t allow you to track inventory from different shipments or production batches separately. Amazon labels require you to either apply the labels during your production (and, therefore, have product prepared specifically for Amazon) or pay the $0.20 Amazon labeling fee.

It’s worth mentioning that there is a middle ground between the two labeling options: printing Amazon labels directly onto your packaging. For manufacturers who sell their products exclusively on Amazon, it may make sense to just use Amazon labels and print them on your products’ packaging directly on the production line, thus avoiding the need to apply Amazon labels as a separate prep step.

 

Register and Purchase your GTIN Codes

One additional expense that you’ll encounter during the process of securing GTIN codes for your products is actually registering your business with GS1 and purchasing associated barcodes. Rates for this process vary, but they typically run in the hundreds of dollars for a few dozen barcodes. 

Many sellers attempt to get around this by purchasing barcodes from a third-party broker, but we would caution against that approach. We’ve seen numerous instances of sellers either being blocked from creating products due to the codes being originally registered to a brand that doesn’t match the listing they’re trying to create, or having issues claiming brand ownership over that product down the road due to this misalignment of third-party labels. 

Whether you choose to use manufacturer barcodes or Amazon labels, if you’ll be creating the initial product listing on Amazon, we recommend using GS1-issued GTINs that have been registered to your brand.

Product Codes

 

Comply With Amazon’s Labeling Requirements

You’ll still need to comply with the labeling and prep requirements for FBA, regardless of which option you choose. 

Amazon Seller University has a couple videos that neatly lay out these requirements here and here, as well as guidelines in their help article (Seller Central login required) here. The main points to pay attention to are:

  • Put a barcode on each item, even if it’s in a case pack
  • Cover all other barcodes that aren’t the label you want them to scan (either the manufacturer barcode or the Amazon label)
  • Place the barcode on the outside of prep materials, avoiding any curves or corners of the package, and make sure it’s at least 0.25 inches from the edge of the packaging
  • Ensure label dimensions fall between 1 inch x 2 inches (minimum) and 2 inches x 3 inches (maximum)

You can print Amazon labels for your products by going to the “Manage Inventory” page in your Seller Central account, selecting the product(s) that will receive the labeled inventory, and selecting the “Print item labels” option from the dropdown.

 

Manage Inventory

 

Following the above guidelines will make sure Amazon receives your inventory properly and doesn’t flag your inbound performance or potentially prohibit your ability to ship in inventory for that SKU. 

 

Implement Your Labeling Method

Given the above information, you should have everything you need to make an informed decision on whether to use manufacturer barcodes or Amazon labels. Now it’s time to actually make it happen in your Seller Central account.

Any time you create a new SKU, Amazon forces you to make this determination. After entering all the vital information to create a new SKU, you’ll see the below screen where you can toggle the barcode type via a dropdown selector.

 

Seller Central - Send Inventory To Amazon - Amazon

 

You can also change which of these settings is the default when creating new SKUs by going to Settings → Fulfillment by Amazon → FBA Product Barcode Preference.

 

FBA Product Barcode Preference - Amazon

If you’re using Amazon labels, you can set the preference for who will apply labels (Amazon or you) universally at the account level by going to Settings → Fulfillment by Amazon → Default - Who Labels?

 

Optional Services - Amazon

 

If you’re not sure whether a given product is set to receive manufacturer barcodes or Amazon labels, the best way to find out is to add the “FNSKU” column to your “Manage Inventory” screen. 

  • If the FNSKU for the product is the ASIN, then it’s set to receive manufacturer barcodes 
  • If it has an FNSKU starting with “X00,” then it’s set to receive Amazon labels

To change a product that is set to receive manufacturer barcodes to one that’s set to receive Amazon labels, you’ll need to create a new SKU that’s set to receive Amazon labeled product. And if you want to change a product that’s set to receive Amazon labels to one that’s set to manufacturer barcodes, you have three options:

  1. If the SKU has existing or inbound inventory, you’ll need to create a new SKU that’s set to receive manufacturer labels for that ASIN 
  2. If the SKU does not have any existing or inbound inventory, you can convert it directly in the shipment creation flow from the “Set Quantity” page 
  3. If you want to convert multiple SKUs, you can do so in bulk from the “Convert eligible offers” page, available in your Seller Central account here.

 

Label Yourself A Pro

Once you’ve got all this down, you’ll have the labeling fundamentals in place to handle most of the curveballs that Amazon can throw at you. Now you’re ready to wade into the fun parts of growing your business like competitor research, creating some fancy product videos, or planning your next big marketing campaign.

Of course, your labeling strategy (as with many things on Amazon’s platform) isn’t a set-and-forget decision. 

There are all kinds of edge cases that can still impact your product labeling, from custom products without GTINs, to international expansion, to enrollment in Small and Light, to counterfeit control via Amazon’s Transparency program—all of them have some interplay with your labeling strategy. 

If that all sounds overwhelming, we’re here to help guide you through this and the thousands of other considerations that come with selling on Amazon.

CONTACT US

 

Tagged: Amazon Transparency, Amazon Channel Management, Selling on Amazon, SKU Code, UPC Code, Amazon Fees, Amazon Labels, Product Label, Barcode, UPC, SKU, Commingled, FNSKU, Small and Light, Stickering

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