Have you ever wondered how stores seem to know exactly what they have, what’s selling fast, and what’s not moving at all? It’s like they have a secret helper keeping everything in check.
This helper isn’t a person but a tiny code called an SKU, or Stock Keeping Unit. Think of it as a special name tag for every single product that enters a store.
In this blog post, we’re diving into the world of SKUs. We’ll explore what they are, why they’re so important for businesses, and how they make shopping better for you.
Contents
What is SKU?
An SKU stands for Stock Keeping Unit, a unique set of numbers and letters used to differentiate and keep track of products’ stock levels internally.
SKU numbers are usually made up of an alphanumeric combination of eight-or-so characters to track the product details, price, and product manufacturer.
An SKU code includes both numbers and letters, which is easy to read at first glance and contains essential information.
For instance:
- A black cotton T-shirt, size small: TS0150706992
- A white leather coat, size medium: C-LEA-ME-WH
- One kilogram of rice from Thailand: TR00421IHT
- One kilogram of Australian beef: BE-1KG-AUS
Businesses use SKUs to track and identify their products. An SKU can ensure no confusion between products since each permutation has only one code.
The Importance of SKUs
SKUs do a lot more than just keep things organized. They make tracking your inventory a breeze. Imagine always knowing exactly how many of each product you have in stock without breaking a sweat. That’s what SKUs do for you.
But it doesn’t stop there. SKUs also make stocktakes simple. They help you quickly figure out what’s in your storeroom, keeping everything neat and tidy. This organized system means managing different types of products becomes much easier.
One of the biggest perks of using SKUs is that they help you keep an eye on your profits. By tracking which products sell the best, you can focus more on what your customers love.
Plus, SKUs are great for spotting any problems with inventory, like when items are lost, missing, or damaged. With everything neatly categorized, you can pinpoint issues fast and fix them.
For e-commerce businesses, SKUs are invaluable. They not only make managing your product catalog a breeze but also offer tons of benefits. They give you insights into buyer behavior, help you predict sales trends, and reduce the risk of running out of popular products.
How to Create and Manage Your SKUs
Let’s break down how you can make your own SKU numbers and manage them like a pro.
Step 1: Start with a Top-Level Identifier
Begin your SKU with something that tells you where the product belongs, like the department, product category, or brand. For example, use “AD” for Adidas or “N” for Nike. This helps you know where the product fits in your store just by looking at the SKU.
Step 2: Add Unique Details in the Middle
Next, include details like color, size, item type, or subcategory in the middle of the SKU. For instance, a blue Nike shoe in size 40 could be labeled as SH-BL-40. This part of the SKU gives you specific information about the product.
Step 3: End with a Sequential Number
Finish your SKU with a series of numbers, like 001, 002, 003, and so on. This makes it easy to identify when items were added to your inventory. For example, the third pair of new blue Nike shoes in size 40 could have an SKU of N-SH-BL-40-003.
Step 4: Add SKUs to Your System
Once you’ve created your SKUs, add them to your Point of Sale (POS) or inventory management system. This step is crucial because it makes tracking sales and inventory a lot easier and more efficient than using old-school methods like pen and paper or spreadsheets.
Step 5: Create and Attach Barcode Labels
Finally, turn your SKUs into scannable barcodes to put on product labels. This step makes checking out and counting inventory a breeze. You can use a barcode generator or, if you have an automated system, it might create barcodes for you.
To keep your SKU system effective, stick to a simple format that’s easy to remember. Group similar products together and give them short, memorable SKUs. Using an inventory management system can help automate this process and reduce mistakes.
When creating your SKUs, here are some golden rules:
- Keep it simple. Don’t complicate your SKUs; the easier they are to understand, the better.
- Make them unique. Each SKU should be one-of-a-kind to avoid mix-ups.
- Go for short and sweet. Long SKUs are hard to remember and work with.
- Organize SKUs logically. Arrange the elements in your SKUs in a way that makes sense for your business.
- Avoid leading zeros. They can cause confusion and technical issues.
- Steer clear of confusing letters and symbols. Some letters and symbols (like O and 0, or L and I) look alike, and spaces or slashes might not work well with all systems.
Creating your own SKUs might seem daunting at first, but it’s a powerful way to streamline your business operations. By following these steps and guidelines, you’ll set up a system that enhances your inventory management and helps your business thrive.
FAQ
What is SKU vs UPC?
SKU (Stock Keeping Unit) is a unique code assigned by retailers to track inventory and sales internally. UPC (Universal Product Code) is a standardized barcode for tracking products universally in retail. SKUs are customizable and store-specific, while UPCs are consistent across all retailers.
Can a barcode be the same as SKU?
A barcode is not the same as a SKU but can represent it. A barcode is a visual, machine-readable representation of data, which can include a SKU, UPC, or other codes. SKUs are alphanumeric identifiers used internally by stores, whereas barcodes facilitate scanning and tracking of products.
Can two products have the same SKU code?
Two products cannot have the same SKU code. A SKU (Stock Keeping Unit) is a unique identifier assigned to each product variant by a retailer for internal inventory and sales tracking, ensuring precise management and differentiation of inventory items.
