About Commodity Codes
What are commodity codes?
Commodity codes are standard classification codes for products and services used to indicate services offered by suppliers, and to detail where money is spent within an organization. Using these codes tells buyers what kinds of goods and services suppliers offer, so that buyers and suppliers can quickly communicate their needs and offerings.
There are several sets of commodity codes. The most commonly used ones are:
- NAICS — North American Industry Classification System
- NIGP — National Institute of Government Purchasing
- and UNSPSC — United Nations Standard Products and Services Code
Most government agencies will use one of these sets of commodity codes, so it’s good to learn which commodity codes are in use by the agencies you’d like to do business with.
The NAICS numbering system employs a five or six-digit code at the most detailed industry level. The first five digits are generally (although not always strictly) the same in all three countries. The first two digits designate the largest business sector, the third digit designates the subsector, the fourth digit designates the industry group, the fifth digit designates the NAICS industries, and the sixth digit designates the national industries.
The NIGP Commodity/Services Code is an acronym for the National Institute of Governmental Purchasings’ Commodity/Services Code. The NIGP Code is a coding taxonomy used primarily to classify products and services procured by state and local governments in North America.
The United Nations Standard Products and Services Code (UNSPSC) is a taxonomy of products and services for use in eCommerce. It is a four-level hierarchy coded as an eight-digit number, with an optional fifth level adding two more digits.
The four primary levels of the code are: Segment, Family, Class and Commodity.
Finding your commodity codes
Commodity codes, while important, are not something you need to memorize, nor should you spend a great deal of time curating your list of commodity codes. Most businesses will register with 2-3 codes, while some businesses with a variety of services may select up to 20 codes when registering a profile.
When setting up your profile, you can start typing keywords into the commodity code field. We’ll offer some suggestions in the auto-complete box.
There is no limit to the number of commodity codes you can enter. You can select any number of NAICS, NIGP, and UNSPSC codes as you like.