It typically refers to the item type, gender, brand, color, size, or some other subcategory. The inventory examination capability of SKUs has an exceptional contribution to a company’s revenue. Most often, customers make purchasing decisions after comparing the features of similar products. For example, when a customer purchases a baby car seat, online vendors may display similar items bought by other customers based on SKU information. This may lead to cross-selling opportunities, thereby increasing a company’s profit margin.

It is used to track the item’s history, warranty, and other details related to the product’s manufacturing and distribution. Serial numbers are usually numeric and are assigned by the manufacturer. SKU in retail helps manage inventory, track sales, and improve overall operations for retailers. So, a product has the same UPC no matter where it’s sold, but different stores assign it different SKUs. Square Point of Sale, our free POS app, includes free inventory management software built for smaller businesses. Read more about how Square compares with Shopify and other POS systems.

  1. When each product is individually labeled, you can create reports and predict future growth, allowing you to plan ahead for restocking and investing in certain product lines.
  2. A SKU typically consists of a combination of numbers and letters that identify the product’s characteristics, such as color, size, style, and packaging.
  3. Get free ecommerce tips, inspiration, and resources delivered directly to your inbox.
  4. When done well, product SKU management allows you to optimize your inventory levels and purchasing (and increase revenue).
  5. For example, assume a retailer for a new locally owned lawn and garden store needs to come up with SKUs to begin their inventory procedures.
  6. Stick with numbers and capital letters with separators such as dashes or dots.

Before going any further, it’s important to first clear up the difference between SKUs, barcodes and UPC numbers. SKUs and UPC numbers should complement each other and not be identical. On the other hand, the UPC should identify the manufacturer, in general. A UPC code lookup website will allow you to search for different UPCs or Universal Product Codes. When it comes to SKU vs UPC code, there are a few differences to keep in mind.

But sometimes this just isn’t possible due to workload or lack of editable access to SKUs in your sales channel. But the key is to assess the unique variables that go into the products in your catalog. Then put them together into a logical code that is as short as possible while still making sense.

Is a Barcode a SKU?

If you want an SKU number to convey more information about each item, a different system with more identifiers is needed, as in the example below. To prevent user error, don’t use numbers that look like letters and vice versa when assigning your SKUs. Try Shopify for free, and explore all the tools you need to start, run, and grow your business.

Different SKUs help retailers design advertising campaigns without interference from other vendors. Each SKU represents a specific product variant, allowing logistics teams to identify items quickly and accurately, track stock levels, and minimize inventory carrying costs. For example, the SKU number of a Levi’s pair of green jeans with straight leg and 36’’ may be something like LEV-JN-SL-36-GN. The SKU number helps distinguish this particular product from other jeans in different colors or sizes, making it easier to manage inventory and sales data.

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Every product you sell needs a unique identifier—called a stock keeping unit (SKU)—that helps you differentiate one product from another. In the case of the t-shirt, you’d need a unique SKU code for different colors and sizes. The Universal Product Code (UPC), which is the barcode number that is printed on most retailers’ products, was designed to be used with North American industry practices.

SKUs are sometimes thought to be synonymous with UPC bar codes, but they are distinct. A SKU is an internal code that each business can create for itself, whereas a UPC is the same no matter who sells the product. A barcode is the batch of black lines found on product labels or packaging, which retailers scan when completing a customer’s purchase. The term barcode is often used interchangeably with UPC because most barcodes encode a UPC number. For example, you could use SKU sales data to determine which products to promote or discount, or use SKU inventory data to calculate reorder points and avoid stockouts.

Do I need a SKU number?

This is particularly helpful when you’re looking through the stock in your online store, as you won’t have to cross reference a product list as frequently. When making SKUs, consider your future product goals, and include key internal and external stakeholders. Completing all these steps with a single unified SKU for each product ensures that all the data surrounding the product is also unified.

The first section is 5-digits long and determines the style of the product. The second section is 2-digits long and determines the color of the product. That whole process may seem a little tedious, but don’t worry, you can automate SKU management. Automating your SKU analysis reduces costs and improves the accuracy of your data.

Why Would I Want an SKU Code on a Product?

Unlike universal product codes, or UPCs, SKUs are unique to each business and can be tailored to represent the most important aspects of its products. Having an SKU code allows you to track products and sales more easily. With an SKU it is less likely that the wrong item will ship to customers, and it also assists in returns if needed. SKU numbers will typically appear on a product along with its UPC barcode. Because SKU numbers are intended for the producer to keep track of items, they are not universally standardized – they are company-specific. That means that you can make up any SKU system that fits your needs for your products.

A stock keeping unit is a unique identifier for an item sold by a retailer. Retailers create their own codes based on various characteristics of their merchandise. Typically, SKUs are broken down into classifications and categories. SKU can also refer to a unique identifier or code, sometimes represented via a barcode for scanning and tracking, which refers what means sku to the particular stock keeping unit. The Universal Product Code (UPC), European Article Number (EAN), and Australian Product Number (APN) are special cases of GTINs. For example, if a company provides the SKU to advertise a certain discounted refrigerator, shoppers cannot easily view the same refrigerator at other sellers based on the SKU alone.

Here’s an eight-digit SKU number system that uses two identifiers to represent a top-level category plus an item type for each product. This type of SKU system helps staff recognize key details of any product at a glance. For that reason, it’s a very handy SKU number system for stores, like fashion boutiques, that have item types—like styles or materials—that cross multiple categories. Only Shopify helps you manage warehouse, pop-up shop, and retail store inventory from the same back office. Shopify automatically syncs stock quantities as you receive, sell, return, or exchange products online or in-person—no manual reconciling necessary.

This is because they usually have their own SKU structure that works for all their products across several manufacturers and categories. In your Square for Retail point of sale, start logging your products in your Square Dashboard. To enter a new product, click Create Item in the top-right corner.

At first glance, stock-keeping units are nothing more than a random alphanumeric code. But it does ensure that stock levels displayed on your website are accurate. So they’ll never purchase something, only to be told that the item isn’t actually available.

When products have SKUs, businesses can quickly and easily scan them to see what’s in stock and what needs to be reordered. This helps businesses keep track of their inventory levels and ensure they always have the products their customers need. SKU (pronounced “skew”), short for stock keeping unit, is used by retailers to identify and track its inventory, or stock.

The top-level identifier, the middle numbers, and a sequential number at the end. When you have a tidy SKU number system behind your inventory, it gets even more valuable. Take your learning and productivity to the next level with our Premium Templates.

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