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What Is a Stock Keeping Unit (SKU)? Definition and Guide

what is a stock keeping unit

SKU (pronounced “skew”), short for stock keeping unit, is used by retailers to identify and track its inventory, or stock. A SKU is a unique code consisting of letters and numbers that identify characteristics about each product, such as manufacturer, brand, style, color, and size.

Companies issue their own unique SKU codes specific to the goods and services it sells. Two companies selling the same item, such as yoga pants, would likely issue two different internal SKUS.

The purpose of SKUs is to help companies more accurately and quickly account for every piece of their inventory. They are different from model numbers, but model numbers can be incorporated into a SKU if a company so chooses.

Where SKUs are used

You will typically find SKUS in use in:

  • Warehouses
  • Retail stores
  • Catalogs
  • Etailers
  • Product fulfillment centers

How SKUs are formed

Companies have their own systems for creating unique SKUs, but there is always a specific method involved.

A SKU for a pair of purple Ugg boots in the Bailey Bow style, size 7 might look something like this: UGG-BB-PUR-07.

Or a bottle of Tropicana orange juice, no pulp variety, in an 89-ounce plastic bottle might be issued a SKU by a corner bodega that reads: TROP-NP-PLAS-89.

There is no set way to create a SKU, but companies that develop their own system will want to have a method that everyone follows and understands, so that it is easy to decipher the code. SKUs should be human readable, meaning that you don’t need any equipment to read and break down the code.

What a SKU is not

SKUs are sometimes thought to be synonymous with UPC bar codes, but they are distinct. A SKU is an internal code that each business can create for itself, whereas a UPC is the same no matter who sells the product.

Stock Keeping Unit FAQ

What is stock keeping unit with example?

A Stock Keeping Unit (SKU) is a unique identifier for a product, typically assigned by a retailer or manufacturer. It is used to track inventory and is typically associated with a product's barcode. An example of a SKU is XYZ12345. This would be the unique identifier for a specific product, such as a T-shirt.

What SKUs means?

SKU stands for Stock Keeping Unit. It is a unique number or code used by businesses to track and organize products in their inventory.

What does SKU mean in manufacturing?

SKU stands for Stock Keeping Unit, which is a unique identifier used in retail and manufacturing to keep track of inventory. It is a number or code that is associated with a particular product or item in order to help identify and track it.

How is SKU calculated?

SKU stands for Stock Keeping Unit and is a unique identifier used to track inventory within a business. It is typically a combination of numbers and/or letters that are specific to a product or variation of a product. The SKU can be calculated by assigning a letter or number to each attribute of a product. For example, a t-shirt may have a SKU assigned to it that has a letter indicating the size and a number indicating the color.
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