Definition
A Stockkeeping Unit (SKU) is a unique alphanumeric code assigned to a product by a retailer to track inventory levels and sales easily. Each SKU typically identifies one specific product, including details such as item, brand, size, color, and other characteristics that are distinct from other products in the retailer’s inventory. SKUs are instrumental in inventory management and are often associated with barcodes for automation in the point of sale (POS) systems.
Examples
Retail Apparel Store:
- Product: Men’s T-Shirt
- Brand: ABC
- Size: Large
- Color: Blue
- SKU: ABC-L-BLU-001
Ecommerce Electronics Retailer:
- Product: Wireless Mouse
- Brand: XYZ
- Model: Pro 200
- SKU: XYZ-PRO200-BLK
Grocery Store:
- Product: Organic Bananas
- Brand: Fresh Farms
- Weight: 1 lb bundle
- SKU: FF-BAN-1LB
Frequently Asked Questions (FAQs)
What is the purpose of an SKU?
An SKU helps retailers and businesses manage inventory, track sales, and streamline the checkout process. It aids in identifying products quickly and efficiently.
How is an SKU different from a UPC?
A Universal Product Code (UPC) is a type of barcode widely used in retail globally, assigned by the manufacturer, while an SKU is assigned by the retailer and is specific to that retailer’s inventory management system.
Can different retailers have different SKUs for the same product?
Yes, different retailers can assign different SKUs to the same product for their internal inventory tracking purposes. SKUs are not standardized across retailers.
How do you create an SKU?
Creating an SKU involves identifying the product’s unique attributes such as brand, category, size, color, and then generating a code that incorporates these elements. Retailers usually establish a convention for SKU structure.
Are SKUs used in ecommerce?
Yes, SKUs are extensively used in ecommerce for inventory management, order processing, and sales tracking. They help manage large product catalogs effectively.
Related Terms
- Barcode: A graphical representation of data that is machine-readable and used to track products.
- Inventory Management: The process of ordering, storing, and using a company’s inventory.
- Product Identifier: A unique code or name for a product used in inventory management and sales.
- Point of Sale (POS) Systems: Systems used by retail businesses to process sales transactions.
Online Resources
Suggested Books for Further Studies
- “SKU Success: Build, Manage, and Analyze the Perfect Product Inventory” by John Smith
- “Retail Management: A Strategic Approach” by Barry Berman and Joel R. Evans
- “Essentials of Inventory Management” by Max Muller
- “Barcodes for Beginners: Understanding the Basics” by Kesheena Birch
Fundamentals of Stockkeeping Unit (SKU): Inventory Management Basics Quiz
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