SKU Meaning and How to Use a Stock-Keeping Unit

A SKU, or Stock Keeping Unit, is a unique identifier for products that enable retailers and businesses to keep track of their inventory more efficiently. By using stock-keeping unit (SKU) numbers, companies can more easily locate and order products, as well as keep track of what items are selling and what items need to be restocked. In addition, using SKUs can help prevent theft and loss of inventory.

Both SKUs and product IDs are unique codes used to identify specific products. One key difference is that retailers can choose and edit SKUs, whereas product IDs are usually assigned automatically and cannot be changed. SKU tags are used to track inventory levels, sales, and reorder quantities.

1. As long as you don’t have more than 99 departments, or over 9,999 products in a given department, this system works and is simple to enter and maintain in any POS system.
2. Unlike SKU numbers, when retail stores generate a barcode, they don’t create a new UPC.
3. As the name suggests, inventory management systems help businesses track inventory levels and manage SKUs.
4. Your best-performing products fall in the gross profit range that has a sales ratio significantly higher than the SKU ratio.
5. If you come across a product with the same number as your product, it’s probably a different SKU or type of product.

Unless you only have a tiny number of products, you’ll almost certainly want to invest in an inventory management or enterprise resource planning (ERP) solution. That way, you can easily identify when products are selling well or need to be restocked. A barcode is the series of black lines used by retailers when processing a customer’s order.

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Useful SKU numbers are the result of organizations that put time into creating meaningful SKU architecture and organization. You can even find some companies’ SKUs online by conducting a SKU number lookup. The more logical and informative your SKU numbers are, the easier it’ll be to leverage them for smoother products inventory management. SKUs are located on tags attached to every product in a store or warehouse’s inventory. A SKU (Stock Keeping Unit) is a system used by lots of businesses it makes it easier to track inventory. A customer might refer to your “sku number” if they’re asking for the number on a product tag or label.

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They are typically between eight to 12 letters and numbers, and every single character in them means something. You can make several SKUs for your business with a free SKU generator. The SKU for the pair of jeans is a good example of a simple, unique and short SKU that also shares vital information about the product. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.

Because the SKU serves as the universal identifier for a product, they enable a much more streamlined supply chain process. Typically, the SKU is maintained from the engineering through the manufacturing, importing, inventorying, fulfillment, and even reverse logistics process. That is, assuming the product company performs all these steps in-house. As stated before, third-party sales channels may not use a SKU defined by a manufacturer.

The serial number is assigned to each specific unit as it is manufactured, while the SKU code is assigned to the product at the time of inventory or sale. If your company uses serial numbers, it’s important to keep the two nomenclature systems separate so that you don’t confuse one for the other. If you’re unsure what your serial number is, check with your manufacturer before creating your SKU system or products inventory process. A stock keeping unit or SKU (pronounced “skew”) is a number that is assigned to a product for the purpose of inventory management and ease of tracking. In other words, a stock keeping unit is a unique identifier assigned to each product for easier and more efficient record-keeping. These codes are designed by retailers based on criteria they deem important.

What is the role of SKU in marketing?

Just like inventory management systems, but based in the cloud — allowing users to access them from anywhere using a computer or mobile device. Once you’ve defined a consistent approach for assigning SKUs, only make changes when it’s absolutely necessary. Otherwise, you risk causing confusion and creating inaccuracies in your inventory tracking process. They also make it easier to track product sales, which helps with tracking the performance of your marketing campaigns. SKUs give retailers the power of accurate, real-time inventory tracking. The business world is chock-full of unnecessary and silly acronyms that describe meaningless ideas, like TED (tell, explain, and describe to me).

Once you’re all set up, head to the ‘Inventory Management’ section within your Dashboard to start printing labels. When you plan your SKUs, you need to decide whether to use long character codes or short numeric codes. In the world of retail-related acronyms, SKU is likely one that you’ve what means sku heard a million times, but you may not know the meaning. Taking the time to find the best structure for your SKUs and implement them across your stock will pay off when your system becomes more efficient than ever. But become next to impossible without SKUs or an aligned product catalog.

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Scannable SKUs and a POS system mean that it is easy for managers to determine which products need to be restocked. Use barcode scanners to scan and track SKUs in real-time, helping you manage inventory levels and generate robust sales data. Most barcode scanners can be integrated with other SKU management-related tools, including inventory management and ERP systems. A UPC, or universal product code, consists of a 12-digit numeric code and a barcode that you scan when you go through a store’s self check-out.

Typically, you will want to create a system that maintains a consistent logic, starting with top-level identifiers followed by more unique product- and vendor-specific codes. Wholesalers use SKUs to track inventory and sales for products in their warehouses, allowing them to identify popular items and adjust stock levels to meet demand from buyers. SKU is a unique identifier assigned by a retailer to a specific product. SKU is a unique code assigned to each product with the company’s nomenclature.

They’re similar, you’re right, but they’re used for different purposes. Companies have their own systems for creating unique SKUs, but there is always a specific method involved. To do this, you’ll need a codified system for identifying the major features of your products. If you don’t use an IMS or POS for your retail business (you should), there are also online SKU generator apps and websites, such as this free SKU generator tool by Zoho. If you use a POS, analyzing sales by SKU will reveal which product variants are most and least popular. We believe everyone should be able to make financial decisions with confidence.

Customers can barely see the device from other sellers based on its SKU code alone. Such a system is designed to limit rival companies from poaching customers through matched advertising prices. Brigitte is a retail specialist and staff writer with brick-and-mortar management experience. Before joining FSB, she managed https://1investing.in/ a storefront for several years, working in everything from merchandising, to buying, to sales analysis. Brigitte also has a background in writing, research, and publishing, with an undergraduate degree in writing. Some retailers prefer to use the most general trait as the first identifier and then work down from there.