A SKU (Stock Keeping Unit) is an internally assigned alphanumeric code that identifies one specific sellable item, including its variant such as size or color, for inventory and order tracking.
Why it matters
SKUs let a business know exactly how many of each variant it holds, where it is stored and how fast it sells. They connect the store, warehouse and accounting records, and they prevent mix-ups between similar products. A good SKU scheme is short, consistent and readable, often combining product, variant and size parts. It is chosen by the seller, so it differs from one business to another.
Example
A T-shirt in three sizes and two colors has six SKUs, such as TSH-BLK-S, TSH-BLK-M, TSH-BLK-L, TSH-WHT-S, TSH-WHT-M and TSH-WHT-L. Each has its own stock count.
Common misconceptions
- Confusing a SKU with a barcode (UPC or EAN), which is a public standard code.
- Reusing a SKU for a different product after retiring it.
- Using long or ambiguous codes that staff misread.
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