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Stock Keeping Unit (SKU)

Quick Definition

A Stock Keeping Unit (SKU) is a unique identifier or code assigned to a specific product or item within an inventory or product catalog. SKUs are used to differentiate and track individual products, variations, or versions based on attributes such as size, color, packaging, or configuration. SKUs enable accurate inventory management, stock control, and order fulfillment processes. They also facilitate efficient product identification, pricing, and reordering, particularly in retail, e-commerce, and supply chain management contexts.

What is a Stock Keeping Unit (SKU)?

A Stock Keeping Unit (SKU), sometimes called a SKU code or a SKU number, is a unique alphanumeric code used in inventory management, retail, and ecommerce operations to track individual products throughout the supply chain. SKU numbers, often associated with scannable barcodes or Universal Product Codes (UPCs), provide a specific identifier for each type of product, such as a model number, ensuring accurate inventory control and streamlined checkout processes at the point of sale (POS). Each SKU is formatted according to a specific template of special characters, numbers, and dashes to create a unique identifier for each product.

In the context of inventory management systems and point-of-sale systems (POS systems), SKUs play a vital role in tracking inventory levels, managing stock levels, and forecasting inventory needs. Each SKU corresponds to a particular product or item, and businesses use SKUs to differentiate between various product offerings and manage stock levels effectively.

In retail stores and online stores, SKUs are extensively utilized to categorize products and facilitate inventory management. Ecommerce platforms like Shopify employ SKUs to organize products in catalogs and manage inventory efficiently across multiple product fulfillment centers.

For businesses, especially small businesses, SKU management is essential for accurate inventory control, avoiding stockouts or overstock situations, and optimizing product fulfillment. By assigning unique SKUs to each product variant or version, businesses can accurately monitor sales data, analyze metrics, and track real-time stock levels.

In ecommerce, SKUs are integral to product fulfillment, ensuring that the correct product is shipped to the customer based on the SKU associated with their order. When a product is scanned at the point of sale or during inventory management, the SKU linked to that specific product enables seamless tracking of stock movements and sales.

UPCs, also known as barcodes, are commonly used to associate different SKUs with physical products, streamlining the tracking of inventory and sales data. The UPC, linked to the SKU, facilitates efficient inventory management, reducing errors and enhancing supply chain operations.

In conclusion, Stock Keeping Units (SKUs) are unique alphanumeric codes that serve as identifiers for individual products in inventory management, retail, and ecommerce. Scannable barcodes or UPCs associate SKUs with physical products, enabling accurate inventory control, efficient checkout processes, and streamlined product fulfillment. Businesses utilize SKUs to manage inventory levels, forecast inventory needs, and optimize supply chain operations. In retail and online stores, SKUs play a crucial role in categorizing products and organizing catalogs. For businesses of all sizes, effective SKU management is essential for maintaining accurate stock information and ensuring customer satisfaction through precise product tracking and fulfillment.