What is a SKU?
SKU stands for Stock Keeping Unit which is an individual item, such as a product or a service that is offered for sale. The item is represented by a unique code specific to the company that sells the item. The SKU includes specific details about the product such as product size variation and unlike a barcode it is human readable. The SKU is unique to each product and variations within a product range. The chief benefit of using a SKU code is that businesses can take much more accurate inventories, facilitating more efficient order fulfillment.
Why not just use the barcode?
Many people do use barcodes as a SKU codes in their fulfillment however a SKU should be unique to your company. If you resell products sourced from a manufacturer they may change the barcodes. If that happens then your SKU is out of sync and needs to be updated as will everywhere that SKU is required such as:
- eCommerce platforms like Magento
- Trade customers
- Fulfillment houses
- Marketplaces such as Amazon
Even a manufacturer will use their own SKU which is separate from the barcode. The benefits of using SKUs is that they are human readable and the relationships between products can be more easily discerned such as different sizes of jeans. Also if you sell lots of lines looking at a list of barcode is not very helpful for identifying what the product is without using a scanner or looking up the barcode in a database, negatively affecting order fulfillment.
Would a serial number do?
If you are the manufacturer of the product you may intend to add to a range in the future. If all your existing product SKU are sequential number strings the relationship of a new product to that range will not be apparent.
What details should it include?
A SKU usually includes the following details such as the manufacturer, product description, material, size, color, packaging, some even include details about the warranty. For example, in their fulfillment Levi Jeans use the following SKU code for their jeans:
LEV is an abbreviation of Levi, JN stands for Jeans, SL denotes Straight Leg, 36 means a 36″ waist, and GN stands for Green.
It is a good idea for the code to be extendable for example if you supply in cases for trade sales you will want a SKU for a case of the jeans to be something like this.
In this case the C stands for a case and the number of units in that case.
- Unique to companies – barcodes are not
- SKUs are (when used correctly) human readable
- They are better for accurate stock keeping, in turn improving order fulfillment performance
- Variations are displayed in an obvious way
- They show product ranges in an obvious way
- SKUs are extendable and allow for future growth
We use SKUs to ensure our eCommerce fulfillment service maintains world class quality and accuracy.