As businesses expand to multiple sales channels—such as physical stores, eCommerce platforms, and marketplaces—they often neglect to harmonize Stock Keeping Units across these platforms. This inconsistency complicates inventory tracking and can lead to stockouts or overstocking in different sales channels. Without a standard structure or convention for creating Stock Keeping Units, businesses can fall into the trap of inconsistent codes. For example, one employee might create a SKU based on what means sku color first and size second, while another might prioritize size over color. This inconsistency creates confusion for staff, leading to mistakes in inventory handling and stocktaking. India’s eCommerce market has seen explosive growth in recent years, driven by increased internet penetration and mobile usage.
Tracking product batches is essential for businesses that deal with seasonal products or limited-edition releases. By creating specific SKUs for each batch, retailers can quickly identify which products in stock belong to a particular batch. This is particularly useful for products with expiration dates or those that are part of a specific campaign.
This efficiency is crucial in meeting customer demands and minimizing lead times. Ultimately, SKUs allow you to keep track of how many items you have sold and how many are remaining either on-premises or online, to avoid overstocking or stock-outs. One of the most frequent mistakes is creating SKU codes that are too long or overly complex. While it might seem logical to include every piece of product information in the SKU, such as size, color, material, and supplier codes, an overly detailed code can cause more harm than good. Employees may struggle to remember these long codes, leading to human error when inputting or retrieving Stock Keeping Units.
When a customer places an order, the system identifies the exact product through the SKU eCommerce system, making it faster to pick, pack, and ship. This not only speeds up fulfillment but also reduces the risk of sending the wrong item. So, an SKU for a red, medium Nike shirt might look like SHIRT-NIKE-RED-MEDIUM-FALL22. This level of detail in an SKU allows for quick sorting, managing, and tracking of stock. Best practices include maintaining consistent naming conventions, ensuring SKU uniqueness, performing regular audits, and integrating SKUs with inventory systems. Establish a centralized information hub where all Stock Keeping Unit-related data is stored.
This setup ensures changes to SKUs are updated in real-time across all departments and sales channels. Centralization helps maintain consistency and accuracy for online retailers and e-commerce platforms where inventory needs to be precisely tracked. By tracking how quickly certain SKUs are moving, businesses can set precise reorder points that prevent overstocking and stockouts. This balance is key to maintaining a healthy cash flow and ensuring that capital isn’t tied up in unsold inventory. SKU, or Stock Keeping Unit, is a unique code used to identify each individual product in your store.
For example, if a customer orders three items, each item would be considered a separate line in the order. Doing so makes it more difficult for a consumer to find the exact model at another store while decreasing the chances of competitors matching pricing strategies with the same information. It can also help to reduce the practice of consumers visiting stores to compare prices for items they intend to buy online instead.
Stock Keeping Unit implementation is crucial for effective inventory management. SKUs facilitate precise tracking of products, helping ecommerce businesses maintain accurate inventory levels. This is crucial for preventing overstock or stockouts, ensuring a streamlined supply chain. In the intricate landscape of supply chain management, the SKU (Stock Keeping Unit) plays a pivotal role in streamlining operations and enhancing efficiency.
Conduct regular audits of your SKU database to identify and rectify discrepancies. Ensure that SKUs are updated to reflect changes in product attributes or variants. While there are two simple ways to create SKUs — either manually in a spreadsheet or automatically through a SKU generator — there are several effective strategies to manage them. Zeller for Startups is an all-in-one solution for founders to manage money, track expenses, and earn more from their capital. Each industry adopts SKU formats that reflect its unique product offerings and customer needs. When adding products or importing products to Shopee, Lazada, and TikTok Shop from the Seller Center or App, sellers can fill in the created SKUs.
While both barcodes and SKUs are designed to identify products, they are used in different contexts. For example, let’s say a manufacturer produces a variety of shampoos under the same brand. The manufacturer would use a barcode (UPC) to track how many bottles of each shampoo are shipped to retailers. Square Point of Sale, our free POS app, includes free inventory management software built for smaller businesses.
An intuitive and well-organised SKU management system enables staff to look up product information quickly and accurately to answer customer questions on the spot. For example, if a customer visits a store in person and the sweater size they want isn’t in stock at that location, you can have them order online or visit a nearby store where it is in stock. SKU-specific sales data helps businesses analyze product performance, identify trends, and make data-driven decisions. By tracking which SKUs sell the most or the least, you can adjust pricing, restocking, or marketing strategies accordingly. With a few exceptions, like food and car parts, all products should have a unique identifier, and that identifier should be included on all sales orders.
Barcodes can be scanned by any barcode generator and often include information that’s relevant to external parties, like suppliers or distributors. However, product SKUs are used internally to track and manage stock effectively. Understanding the role of SKU in inventory management is paramount for businesses seeking operational efficiency and accuracy in their supply chain processes. An SKU, or Stock Keeping Unit, is a unique identifier assigned to each product for the purpose of inventory tracking and management. Unlike a universal product code (UPC), which is standardized for identical products across different stores, an SKU code is specific to a single store or company. This unique identifier is used to track inventory availability, monitor sales for specific items, and manage replenishment needs efficiently.
