SKU Meaning: What Is SKU? Best SKU Number Examples

UPC, on the other hand, is a standardized barcode system used to identify products globally. It is assigned by the manufacturer and includes a 12-digit number that represents the product and its features. UPC codes are used to scan products at the point of sale, track items, and improve supply chain management. To automate the process, you want to leverage POS systems with integrated inventory management and other tools like barcoding.

SKUs can be any length, but they’re typically between eight and 12 characters. This length reflects the necessary information about a product without additional bulk. Also, most inventory management systems are built to read SKUs within this range, so longer codes may cause delays or malfunctions. Retailers use SKUs to track what’s selling, which helps them know when to restock from vendors. SKUs are making the shopping experience more efficient than ever before. Moreover, online shopping logistics are greatly improved and enhanced via SKUs.

  1. So a product has the same UPC no matter where it’s sold, but different stores assign it different SKUs.
  2. The SKU does more than just identify a product or track inventory.
  3. Divide the number of SKUs in a range by the number of total SKUs (and multiply by 100) to get your SKU ratio for each range.
  4. This helps track sales by location or outlet and makes it easier to track inventory quantities per store.

In fact, many sales channel partners consider the SKU that you offer them (assuming you are the manufacturer) as an “MPN” which stands for “manufacturer part number”. There are a lot of reasons for this, but the primary one is that two different manufacturers can technically have the same SKU. Obviously, when this happens it creates a mountain of headaches for retail businesses. For this reason, many retailers or distributors simply create their own SKU system. SKU numbers are usually (not always) made up of three different sections.

What are SKU tags used for?

SKUs may be adopted by channel partners, however, they are primarily used internally. There is no “standard” when it comes to the structure of SKU numbers. Take your learning and productivity to the next level with our Premium Templates.

They’re not used externally (with customers) and scanned at checkout like a UPC is. In short, you smooth your entire product inventory management process when you use and create SKUs. If you don’t yet have one, what means sku devise an easily decipherable code for generating SKUs, referencing information like the type of item, size, color, maker, etc. If you’re not interested in creating your own system, try a SKU generator.

Probably the number one benefit of having standardized SKUs is how much easier it makes tracking inventory across multiple channels. And this will cause a major headache at some point along the line when it comes to managing one product catalog across multiple sales channels. But the key is to assess the unique variables that go into the products in your catalog.

The humble stock-keeping unit (SKU) may seem like an innocuous little number. If you’re going to use SKUs, their management is incredibly important. SKU management allows you to analyse the cost of carrying each product so you can be sure that every piece of inventory meets the financial objectives of the business.

The SKU is then entered into the inventory management system, which is tied to the point of sales system. The retailer is then able to track inventory and sales through detailed reporting. An SKU system also allows retailers to create data regarding their customers, sales, and inventory. A stock-keeping unit (SKU) is a number that allows vendors to automatically track inventory in their stores. The number usually consists of eight alphanumeric digits and a scannable bar code and is most often printed on products in a retail store. The characters make up a code that tracks the price, product details, manufacturer, and point-of-sale.

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. They’re similar, you’re right, but they’re used for different purposes. Companies have their own systems for creating unique SKUs, but there is always a specific method involved. You can use Square for Retail to print labels for all your products that include a SKU.

Are SKUs and UPCs the same?

The first part is the top-level identifier, followed by middle digits, and ending with a sequential number. Often, SKU numbers use an alphanumeric code to help create unique identifiers for each product. The first two or three digits/characters of each SKU should represent a top-level identifier. With this, a glance at an SKU number identifies the top-level merchandising group and location of any product in your store.

What Is a POS Terminal?

Using software to manage your inventory allows you to electronically track items in real time and automatically update inventory. In addition, built-in analytics help you create more efficient purchasing processes and more effective sales and marketing strategies. Embracing ecommerce automation can revolutionise your inventory management and boost overall efficiency. One of the biggest benefits of using SKUs is that they help with inventory management.

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. It can get a touch more complicated if you’re using different identifiers. Each SKU in the far right column is a collection of the three different identifiers. They are only used internally and each organization that uses SKUs is responsible for its architecture. They are typically between eight to 12 letters and numbers, and every single character in them means something.

When customers can’t physically see or touch the product they’re buying, they need as much information as possible to make an informed decision. By including SKUs in your product descriptions, you can give customers all the information they need about a product before they make a purchase. A popular projector screen brand offers its products in custom sizes, colors, and mounting variations. This results in 100’s of thousands of possible variations in their product portfolio. On top of this, they also offer each screen with a sub-set of over 15 screen material options. The SKU structure of this brand required a much deeper set of sections to accommodate the large possibilities of variations.

It can also help to reduce the practice of consumers visiting stores to compare prices for items they intend to buy online instead. In Veeqo you get a list of products in that warehouse to count, and can easily make changes if any discrepancies are found. But without one aligned SKU per variant, you and your team would be completely wasting time. You can even easily draw up a quick purchase order, and auto-populate all your products low on stock for each warehouse and/or supplier.

Keep in mind, though, that our recommendations are very general, and the right solution for your company will depend heavily on your business’s needs and priorities. Many retailers, for instance, find that using UPCs is simpler since they don’t have to generate all-new SKUs for each item on their shelves. And many wholesalers use SKUs to simplify their internal inventory tracking. SKUs can also be helpful if your company sells hundreds or thousands of items since shorter, alphanumeric SKUs make it easier to find and track specific products.

A stock-keeping unit (SKU) is an alphanumeric code that identifies a product and helps you track inventory for your retail business. The information your SKU includes is completely up to you—distinguishing it from a universal product code (UPC), a standardized 12-digit code manufacturers use to identify products. Depending on the type of inventory, your SKU number can include identifying information for everything—from department to style, gender, size, and color. You can create SKU numbers manually or automate the process with an inventory management or point-of-sale (POS) system.

Best practices for generating SKUs

Having two different SKUs is effectively like having two different products, just with the exact same titles and descriptions. We can add all this together and clip out a few erroneous letters for the SKU. Or if you sell to women only, adding an ‘F’ or ‘W’ in the SKU is pointless. Always remember that the goal is to help employees and delivery teams understand what product a SKU is referring to as quickly as possible.

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