Barcode Inventory Management in 2025: Systems, Scanners & Apps

Closing time shouldn’t feel like a paper obstacle course. As you already know, physical inventory counts are slow and tedious, but they also feed into a bigger problem—inventory distortion. 

IHL Group found that in 2024, inventory distortion—the combined cost of stockouts and overstocks a retailer has—reached an estimated $1.7 trillion globally. Of that, about $1.2 trillion was from stockouts alone, meaning sales that didn’t have to be lost, were lost. 

A barcode inventory system changes that. Every SKU gets a unique ID, each scan updates stock in real time, and data stays in sync across your business. This guide explains how barcode inventory management works, and how to set up a system. 

What is barcode inventory management? 

Barcode inventory management is the practice of tracking your store’s products with barcodes and scanners. Barcodes are machine-readable product codes that you scan. 

When scanned, barcodes reveal key information about a product, including its name, price, and on-hand quantity. This system can track:

• Receiving: Items are scanned on their way into a warehouse or store. 
• Moves/putaway/transfers: Scans record each item’s current location, and movements between locations.
• Sales/returns: POS scans automatically decrease or restore on-hand inventory counts.

With a commerce operating system like Shopify, POS and online data live in one place by default, so quantities update automatically after each scan or at short sync intervals. This ensures accurate counts and guides decisions on reorders, allocation, and markdowns.

📚 Learn: Inventory Management: Everything You Need to Know

How a barcode inventory management system works

In retail, a barcode inventory management system streamlines how you track and manage products. 

Here’s how it works: 

1. Assigning barcodes: The system assigns a unique barcode to each product in your inventory. The barcode encodes an ID, and the system maps that ID to the product’s name, internal SKU, price, and quantity by location.
2. Printing and labeling: Print and apply labels to items and cases, and label locations (aisles, shelves, bins) based on what inventory is stored there. Location labels help you scan moves accurately.
3. Scanning at point of sale: When a customer purchases an item, the cashier scans the barcode at checkout. This action automatically deducts the item from your inventory count in the system, providing real-time updates on stock levels.
4. Receiving and updating inventory: Upon receiving new stock, scan the barcodes of the incoming products. The system then updates your inventory quantities, ensuring your records are accurate and up to date.
5. Stock monitoring and reordering: The system continuously monitors your inventory levels. When a product's quantity falls below a predetermined threshold, it can trigger an alert, prompting you to reorder it. This ensures you never run out of bestsellers.
6. Data analysis and reporting: Beyond just tracking inventory, the system can analyze sales trends and generate reports. This data helps you decide which products to stock up on and which ones to phase out.

📚 Learn: Automated Inventory Management Systems: Key Features and Benefits

Plan your barcode system

A little planning goes a long way when setting up a barcode inventory system. This step defines which codes appear on products and locations, what each scan updates, and how data flows to your POS and ecommerce site.

Choose a barcode symbology

First, pick your barcode format. There are two main types to choose from:

1. UPC (Universal Product Code): This is the classic, one-dimensionally encoded barcode you see on nearly every retail product—the one with a series of vertical bars that is read horizontally. It’s best for product identification and can tell your system, for example, “this is the blue t-shirt, size large.” A UPC barcode holds only the item’s Global Trade Item Number (GTIN). A product’s GTIN is issued at the time of its first manufacturer, and stays the same wherever the product is distributed or sold.
2. QR codes: These two-dimensional codes, appearing as a roughly square-shaped grouping of lines and boxes, is coded horizontally and vertically to hold more data in less space. A single QR code can hold a product ID, website link, batch number, tracking data, and more. 

Many retailers still require a UPC at POS, while the industry is preparing to accept 2D barcodes at POS by the end of 2027. This means your price-lookup system will use the GTIN in 2D barcodes the same way as it does today with 1D. 

As of today, UPCs are still the standard for identifying products at checkout. If you have more complex needs, such as tracking expiry dates on cosmetics, you can use QR codes for internal management and UPCs for the final product. 

Pick scanners

With your barcodes ready, you’ll need a tool to read them. Invest in a reliable inventory scanner. 

Mobile apps or handheld scanners are a popular choice for their portability and ease of use. These tools will be essential for quick and efficient inventory management because they allow you to:

• Quickly add products to the cart in your POS.
• Receive inventory from purchase orders.
• Perform cycle counts by scanning products on the shelf.

Shopify offers a few different supported barcode scanners:

• Zebra DS2208 (USB) scans 1D/2D and is supported on Android (not iOS).
• Socket Mobile S740/S720 scans 1D/2D barcodes over Bluetooth and is supported with Shopify POS. 
• The Shopify app can also use your device’s camera to scan barcodes and adjust inventory quantities. 

💡 Tip: Start for free using the Shopify app on your smartphone. When checkout lines get longer or inventory counts become a bigger job, upgrade to a 1D or 2D scanner from the Shopify Hardware Store. You can pair the scanner with your Shopify POS app and start using it right away. 

Select inventory software

Choose inventory management software that integrates with your barcode system. The software should allow you to track stock levels, monitor sales, and generate reports. Look for a user-friendly platform that fits your business needs, like Shopify.

Fortunately, Shopify’s own inventory management system is built into your admin. It acts as a single source of truth for your stock, so you know where any item is in an instant. Whether you’re managing stock for your online store, a retail location in Denver, or a third-party warehouse, Shopify tracks inventory levels everywhere. 

Choose printers and labels

The last things you’ll need are printers and labels. There are two main ways to print barcode labels:

• Standard office printer: If you have a small number of products, you can use a laser or inkjet printer. You’ll print on multi-label sheets, which can smudge easily, but there are no new hardware costs. 
• Thermal label printers. These printers use heat to create an image, so you never have to buy ink or toner. The labels turn out sharp and smudge-proof. 

The Shopify Hardware Store offers compatible printers for any price range. Models like the DYMO LabelWriter 550 ($119) or Zebra ZD220 ($279) are popular options for their affordability and print quality. You can also opt for a high-speed printer like the Brother QL Wifi Label Printer for $339. 

Set up your barcode inventory system: a six-step guide

1. Generate and assign barcodes
2. Print and place barcodes
3. Label your inventory
4. Configure hardware and software
5. Make a test run
6. Train employees on scanning procedures

1. Generate and assign barcodes

Start with the identifier. If products already carry a GS1 GTIN (UPC or European Article Number) from the supplier, reuse it. 

For private label items, create GTINs and assign one unique GTIN per sellable variant (every size/color/style) and separate GTINs for higher‑level packaging such as inner packs or cases.

Then, create barcodes for them. Shopify’s Retail Barcode Labels app can generate unique barcodes for products and variants, then print them on supported label sizes and printers. 

2. Print and place barcodes

All barcodes are actually created equal. If you try to get creative, like adding brightly colored bars or backgrounds, it’ll lead to failed scans. 

The best combo is simple: black bars on a white background. Dark blue and dark green bars are also suitable, but you want to avoid reddish bars. As mentioned, keep backgrounds white or as light as possible. Print bars in one ink color—avoid using the four-color process. 

Print at 300 DPI or higher, and when space allows aim for roughly 1.5 inches by 1 inch for UPC-style labels. Don’t shorten the bars (truncation reduces scan rates) and leave clear quiet zones (the unprinted spaces) to the left and right so scanners can “see” the code.

3. Label your inventory

With a fresh roll or sheet of labels printed, it’s time to apply your labels. Do so carefully, as a poorly placed label can fall off or fail to scan, which defeats the whole purpose. 

Apply each label to a flat part of the product, packaging, or a hangtag if the surface isn’t label‑friendly (like apparel). Limit the information on the barcode to an identifier only (UPC/EAN GTIN or internal ID) and include the human‑readable number under the symbol so staff can key it in if a label is damaged.

4. Configure hardware and software

Once you’ve labeled your inventory, connect scanners that your POS supports. 

In Shopify POS, pair a supported Bluetooth scanner like the Socket Mobile 2D, or plug in a supported USB model like the Zebra DS2208. If you don’t have a dedicated scanner yet, the Shopify app can use your device camera to scan both 1D and 2D barcodes at checkout. 

5. Make a test run

After mapping barcodes to products in the Shopify admin, you’re ready to go! Well, almost. Run a quick end-to-end test to confirm your new barcode inventory management system works correctly. 

1. Receive a product by scanning it against a purchase order.
2. Sell it at your POS by scanning the same barcode.
3. Process a return. 

Confirm that the system reflects on-hand counts changed at the intended location after each step, and the product record shows an adjustment history. 

6. Train employees on scanning procedures

A barcode system is only as good as the habits behind it. Start with a standard operating procedure for each workflow, like receiving, transfers, sales, and returns. Everyone should use the same screens and follow the same scan sequence each time. 

In Shopify, enable inventory tracking and guide trainees on how to view inventory history and run stocktakes, allowing them to see the impact of scans on their location's inventory levels. 

Teach the basics:

• Hold the scanner at the manufacturer’s recommended angle and distance. 
• Sweep across the full symbol.
• Avoid glare. 

Staff should check that quiet zones are clear, bars aren’t truncated, and labels aren’t bent around corners or covered by seams or tape. If a code won’t scan, flag it for re-labeling using the human-readable number. 

Pros of a barcode inventory system

Whether you run a global ecommerce store or a small retail shop, implementing a barcode inventory system has several key benefits. 

Streamlines operations 

Barcode inventory management enhances both checkout and stock replenishment processes. Scanning barcodes is faster and more accurate than manual data entry, leading to quicker transactions and reduced queue times.

Plus, barcodes streamline your internal inventory management processes, making it possible to scale up operations. 

For example, Yann Marchal, partner at Momo Lifestyle, explains that if you work with a 3PL, barcodes can ensure there’s a common language between retailers and the company.

“We can’t expect the 3PL to know our different products and their specifications as well as we do, and that’s why barcodes help to identify this,” he explains. “One important point to facilitate scalability in the operation is to also use a separate barcode for your product’s unit packaging and its master carton packaging. This allows your 3PL to send full cartons of products to the warehouses of B2B customers, as well as single units of products to direct end consumers.”

Improves the accuracy of inventory control 

Scanning barcodes pulls up detailed product information, significantly reducing human errors in inventory tracking. This accuracy ensures that stock levels are consistently reliable, minimizing the risk of overstocking or stockouts.

Provides real-time data for better decision-making

A barcode inventory management system provides valuable data on sales trends and inventory movement. Retailers can use this information to make informed decisions about product ordering, pricing strategies, and promotions.

Improves inventory ROI

Barcode systems return value through savings on labor, reduced errors, and recovered sales. GS1 UK cited in 2019 (the most recent statistic on this we could find) that manual data entry carries a 1% error rate, about one error for every 100 keystrokes. Barcode input reduces errors dramatically, showing rates as low as 1 in 2.8 million. 

Consider how many items your staff scan barcodes each week. Say it’s 15,000 items flat across receiving counts and checkout, and scanning saves 6 seconds per item versus typing. That’s 25 hours per week, and around 108 hours per month saved before even factoring in any added time from unscannable labels. 

If you’re paying around $20 per hour per associate, that’s about $2,165 of labor cost per month. 

Cons of barcode inventory system

No matter the inventory management system you choose, there are always a few drawbacks. Before jumping in, consider the main cons of using barcodes.

Upfront costs

Implementing a barcode inventory management system requires an upfront investment in hardware, software, and infrastructure. Retailers need to consider the cost-benefit ratio and ensure the investment aligns with their business scale and budget.

Training time 

Your team will need to learn how to use the new system. This can take time and might slow things down at first. But once everyone's up to speed, processes should run smoothly.

Technical issues

Sometimes, technology can malfunction. Scanners might not read a barcode, or the software could have a glitch. It's important to have good tech support to fix any problems quickly.

Barcode inventory management apps 

To help you choose a barcode software solution, here are three easy-to-use apps. 

1. syncX

syncX is a user-friendly barcode scanner app with a simple setup. The app lets users quickly scan and decode barcodes, making it an ideal tool for retailers getting started. 

The app also makes it simple to add and deduct inventory quantity in-store and transfer stock between locations.

Key features:

• Quickly scan multiple barcode formats, including QR codes, UPC, EAN, and more.
• Track inventory levels, organize products, and update stock information in real time.
• Export scan data to CSV files.
• View historical records of all scanned items for easy reference and tracking.
• Move inventory between stores or warehouse locations.

Pricing: Starts at $5 per month for up to 100,000 inventory updates. 

2. EasyScan: SKU & Barcode 

The best part of EasyScan is that it’s compatible with all scanners. In addition to generating printable barcodes, you can use the app to create SKUs too. 

Key features:

• Scan SKUs and multiple barcode formats, including QR codes, UPC, EAN, and more.
• Generate custom barcode labels.
• See the exact product bin location.
• Monitor inventory levels in real time.
• Access detailed product information, including descriptions, prices, and stock levels.
• Export scan data and inventory reports to CSV or Excel files.

Pricing: Starts at $9.99 per month with a 10-day free trial.

3. iPacky 

iPacky is a barcode inventory app for Shopify that streamlines the order fulfillment process. It offers tools for barcode scanning, batch picking, and packing, helping retailers reduce errors and increase efficiency in their packing and shipping operations.

Key features: 

• Supports batch picking and printing of pick lists or packing slips.
• Provides bin locations. 
• Shares optimized picking routes for faster and more organized picking.
• Supports bundles by ensuring all items in kits or bundles are correctly picked and packed.
• Customizes workflow requirements. 
• Provides multi-user access.

Pricing: Free plan available. 

Tap into barcode inventory management for your store

Using barcodes is an easy way to streamline your inventory control. Instead of wondering whether you have enough stock in each location, a quick barcode scan can show you exact stock levels and bin locations. 

Whether you’ve just set up shop or run a thriving store, barcode inventory control will save time and help you scale.