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What Is A SKU?

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A stock keeping unit, most often abbreviated as “SKU,” is an identifying string of characters utilized internally by an online or brick-and-mortar store. A SKU, pronounced like the word “skew,” quickly highlights unique characteristics about a product, such as brand, color, size, manufacturer, and more. This allows employees to, with just a glance, differentiate between precise products.

By learning to effectively develop, format, and use a SKU system, you can increase the organizational level and positively influence the profitability of your online store.

How To Use SKU Codes

SKU codes help business owners track and organize inventory, both physically and on digital programs. Plus, proper SKU code usage expedites the process of and ensures complete accuracy when answering customer questions and dealing with exchanges and returns. Commonly, SKUs are used not only by retail and “etail” stores but also by their associated warehouses, catalogs, and product fulfillment centers.

However, use caution not to confuse a SKU code with a UPC barcode. While the latter is part of a globally standardized system, a SKU code can vary among different retailers - even on the exact same product. It is up to each business owner to decide on the format, length, and abbreviation system when creating the SKU codes for their products.

SKU Code Formatting Tips

To make the best use of your organizational structure, follow these common practices when designing your SKU code system:

  • Create a unique string of letters, numbers, hyphens, and/or underscores. To avoid confusion when entering SKUs into digital programs, don’t use any other special characters or spaces.
  • To maximize SKU code clarity, aim for a length of 8-16 characters. However, if the variety of your products allows, you can use even less than that.
  • Design your SKU code system with simplicity in mind. Each character should add value and have a purpose. After all, your SKU codes will be deciphered by human eyes, not a computer.

Examples

To benefit the store and the employees, each business owner should decide how to most effectively set-up and organize a unique SKU code hierarchy. Here are some examples to help the brainstorming process:

  • A shoe retailer could choose to set SKU codes based on brand, style, color, then size. So a pair of red, high-top Converse in size 8 would have the label CON-HT-R-8. A pair of size 10, gray, Nike running shoes would have the SKU NIK-RUN-G-10 on this retailer’s system.
  • A clothing retailer uses only numbers to classify her SKUs, setting a numerical digit to each brand sold in the store. Levi’s are brand 8455. So, a pair of boot-cut (style 776) Levi’s in a size 32x34 has the SKU designation of 8455_776_3234.
  • A decorative retailer might set up a SKU system identifying an item’s size, color, and material. According to this structure, the SKU of ET-203624-WTWLNT refers to a line of side tables, measuring 20x36x24 inches, made out of white walnut wood.

Elevate Productivity With A Solid SKU Code System

SKU codes are essential to the profitability of any growing retailer. They help keep a company organized internally so that the store can perform at the highest level possible. By implementing a simple, clear SKU code system, you will set your company up for continued success.