In this article, you’re going to read all the necessary things about SKU from scratch to end. The information below is made compact yet complete enough. So it won’t take more than 6 minutes to read.

Table of Contents

1. What is an SKU?
2. How to create an SKU
   • Rules to Create an SKU
3. General SKU Formats
4. How SKU can help you optimize your inventory management.
5. SKU vs Barcode vs UPC
6. Aligning SKUs across your sales channels
   • Ways to avoid SKU conflict
7. Manage products without updating SKUs

What is an SKU

SKU stands for Stock Keeping Unit. Basically, this term is used in the field of inventory management. It can be a simple alphanumeric, textual or numeric code. It is assigned to products and/or variants in a retailer’s catalog. Thus, this code possesses great significance regarding effective inventory management.

How to create an SKU

There is no such hard and fast rule to create an SKU. Every retailer opts for different strategies to create SKU format. One thing that must be kept in mind while creating SKU is, an SKU should be scalable enough to accommodate new products or variants.

Rules to create an SKU

Here are some of the rules you should follow while creating an SKU. These rules work best for efficient inventory management.

• Be unique.
• The format should be extendable/scalable.
• Include only important information; avoid irrelevant factors.
• For each product and variant, be committed to one format.
• Avoid confusing similarities in factors.
• Follow a logical architecture that’s repeatable for any inventory variant.
• Keep the same order in SKU factors for each variant.
• Try to limit it to around 8-12 characters.
• Always start with a letter, not a number.

General SKU formats

A general SKU may contain the following information:

• Brand
• Product
• Gender
• Size
• Color
• And more

For multiple retailers, the SKU can contain all of the above factors. Like:

Another example can be an alphanumeric SKU:

Here are some other examples,

• SK-TS-BK-SM-M
  • Stock Konnect – T-Shirt – Black– Small – Male.
• SK-TS-BL-MD-F
  • Stock Konnect – T-Shirt – Blue – Medium –
• SK-TS-RD-LG-M
  • Stock Konnect – T-Shirt – Red – Large– Male.

Make sure that these SKUs must be unique for each retailer.

How SKU can help you optimize your inventory management

To optimize your inventory management, SKU can help you:

• Know how many items of a specific product are available.
• Monitor stock levels of products.
• Detect and reduce inventory shrinkage.
• Locate a specific product.
• Products analysis for a specific purpose.
• Identify stock replenishment points.
• Save time by enabling customers to find products quickly
• Quick and order accurate billing.
• Achieve accuracy in pick and pack.
• Identify most sold products.
• Identify least sold products.
• Run ad to increase the revenue of the least sold variant identified via SKU.
• Push upsells and cross-sells to that variant from other products.
• Analyze future forecasts and purchasing amounts.

This may interest you: Effective strategies to protect inventory shrinkage

SKU vs Barcode vs UPC

First of all, note that an SKU is not a barcode. Unlike the barcode, an SKU alone can let a human recognize a product.

So, let’s see the difference between SKU, UPC, and barcodes.

Adjusting SKUs across all sales channels

A good SKU practice requires you to make sure that you only have one SKU for each product variant across your every sales channel.

If you fail to do so, it can cause a disastrous result for your inventory management.

Having two different SKUs is equal to have two different products having exact same titles and descriptions. And this can cost you major issues that may be unidentifiable; especially when it comes to managing one product catalog across multiple sales channels.

Ways to avoid SKU conflicts

So here are the two options that can help you avoid SKU conflicts:

1. Standardize your SKUs BEFORE integrating a new sales channel.

1. In case you already have multiple sales channels, so remove the conflicts and standardize SKUS for all by matching them up.

Every new product being imported should not require an update in SKUs for the same stock

The eCommerce experts always advise to standardize and regulate your SKUs across every sales channel. But sometimes, accomplishing this manually is not possible due to workload or the absence of editable options to SKUs in your sales channel.

A tool like Stock Konnect has the solution for you. It has an efficient inventory management system for your multichannel selling. Once you add a sales channel or import products into Stock Konnect, it will:

1. Create a new product.
2. Auto-match the product with an existing product in Stock Konnect via SKU.
3. If no matching SKU is found, it would let you create a new one.

You can do this action for bulk or individual products with a few clicks. This means, with Stock Konnect you can manage products and inventory across every channel. For this, you do not need to update any SKUs manually.

Discover how Stock Konnect simplifies the multichannel products selling & inventory management

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Final thoughts

Tracking stock levels and automating replenishment is a key to optimized inventory management. This makes you reach out to more customers. Thus, lets you increase revenue and sales.

Failing to implement and standardize SKUs properly can cost disasters in inventory management. Whereas, perfect implementation and standardization of SKU across each sales channel can reward great benefits. With that, you’ll reach a point where your system becomes more efficient than ever.