What is a SKU? What does SKU stand for? And what does SKU mean?
A SKU (pronounced /skew/), Stock Keeping Unit, is a unique code that consists of letters and numbers that identify characteristics about each product including things such as:
- Manufacturer
- Brand
- Style
- Colour
- Size
The idea is that a SKU helps companies to accurately and efficiently account for their products and inventory. They are unique to each company but there are models that can be used should it suit the needs of a business. The information given in the SKU should be placed in order from most important to least important - depending on what is necessary for that business. For example, should the business need to know the manufacturer of the product first and foremost that should be the first part of the code. The whole point of the SKU is that they are completely tailored to each business and they can be tailored to represent what your customers or vendors ask the most about.
SKUs are used in:
- Warehouses
- Catalogues
- Shops
- Fulfilment centres
What is the difference between a SKU and a UPC?
SKUs are created to track inventory within an individual business and individual products that are sold by different retailers will have varying SKUs. UPCs, or Universal Product Codes, on the other hand are identical across businesses.
What is SKU code?
Companies have their own systems for creating unique SKUs but there is always a specific method involved. Here are some examples (source: shopify):
- A SKU for a pair of purple Ugg boots in the Bailey Bow style, size 7 might look something like this: UGG-BB-PUR-07.
- Or a bottle of Tropicana orange juice, no pulp variety, in an 89-ounce plastic bottle might be issued a SKU by a corner bodega that reads: TROP-NP-PLAS-89.
SKUs are always clear and can be interpreted and understood by human reading. There is no need for technology or equipment to understand what the code means. This means they can be used for quickly finding stock and inventory. You find SKUs printed on many product labels - next time you’re out shopping take a look and see if you can find one.
How do you create an SKU?
When creating an SKU you will need to think about the individual needs of your business, there are models you can follow but at the end of the day the SKU will always be unique to you and your business. There are a few questions you need to ask yourself about your stock:
- How big and varied is your stock? This will determine how many layers you will need in order to identify the item at hand. For example if you have a very large amount of stock you’re going to need to break down your stock by more determining factors. For example for smaller stock you could create a system that tracks customer type e.g. adult/child but if its larger you might want to track the product’s trait as well e.g. including size, gender and colour.
- What do your customers usually ask for? The SKU helps you to quickly find items for customers and check inventory, therefore you’ll want to keep frequent requests in mind when designing your SKU.
- Have you checked your SKU is unique? You need to ensure that your codes mean that you can identify each product separately every time.
You will also need to think about your inventory system when designing your SKU.
There are a few ‘rules’ you need to follow in order to create an effective system:
- Never use the number 0
- Stay between 8 and 12 characters always
- Start it with a letter
Also remember that each letter and number has to have a meaning and the format needs to be easy to understand.
Complete Packaging are experts in all things fulfilment - so should you need any help or advice on how best to manage your stock, get in touch.
