SKU stands for Stock Keeping Unit which is an individual item, such as a product or a service that is offered for sale. The item is usually represented by a unique code that is specific to a company/firm offering it for sale.
The SKU contains general or specific details about the item and is easily readable. The SKU is unique to each product/item irrespective of the variations and the range it is part of.
Benefits of using SKU:
- Specific to your company.
- Helps in easily differentiating between product variations.
- Helps to maintain consistency across selling channels where your item is listed.
- Allows the centralization of inventory when you use automated third-party software for inventory management
- Enables wholesalers to quote and identify every product, and place orders.
Best practices to create an SKU:
- Never start the SKU with a zero.
- Avoid using the numbers or letters of the SKU which are the same as provided by your manufacturer or your supplier. It can create confusion if they change the SKU in the future.
- Don’t use non-standard characters like spaces, slash, etc.
- Avoid using numbers that look similar to letters like O, I.
- Don’t make the SKU very lengthy. Use minimum characters to simplify and comprise the components like product description, variation, packaging, etc.
- SKU is case-sensitive. So SKU in uppercase and lowercase are considered different.
- It is advisable to use an underscore in a long SKU rather than a dash or hyphen.
Let's say the item you’re selling is a Nike Casual T-Shirt and it's available in various colors. The SKUs can be as below:
Nike Casual Red T-shirt: N-Red-101
Nike Casual Blue T-shirt: N-Blue-102
Nike Casual Orange T-shirt: N-OR-103