SKU (stock keeping unit)
What is an SKU (stock keeping unit)?
An SKU, or stock keeping unit, is the internal code a company gives to one sellable item — a specific model in a specific colour and size. Each code points at exactly one position in the warehouse, so stock levels, picking and sales reports all run on it. The seller decides the code; a barcode is different, because it is issued by an outside body and is the same in every shop.
Example
One shoe model in three colours and six sizes is a single product for the customer and eighteen positions for the warehouse. Eighteen codes, because eighteen different things sit on the shelf and are counted separately: TB-CHL-BLK-42 is the black one in size 42 and nothing else.
The code is read by people and by machines. A good structure is short, in Latin letters and digits, with stable abbreviations for category, model and variant, no spaces and no accents. Anything that changes — price, supplier, promotion — stays out of it. A three-pack gets its own code, because it is sold as one position. If 9% of the 2,400 codes in the shop do not match the ones in the warehouse, 216 items go through every exchange without updating, and nobody notices until somebody orders exactly those.
Why it matters for a business
The SKU is the key every system uses to talk about the same item. The inventory program, the till, the shop, the marketplace and the courier label only understand each other as far as that code is identical on all sides. Reporting rests on it too: which items make the turnover, which sit for six months, which size runs out first.
That is why changing codes is an expensive operation — it breaks the sales history. Better to settle the structure once, before a few thousand items are entered, and then keep to it. Matching the codes on both sides is the first thing we check during warehouse sync.
How to improve it
- Write the structure down: category, model, variant — and apply it to every new item.
- Keep price, supplier and year out of the code; those change, the code should not.
- Give every variant and every bundle a code of its own.
- Keep the code when the supplier changes but the goods do not.
- Check regularly for items with no code, and for two codes pointing at one product.