Ecommerce

    SKU (Stock Keeping Unit)

    A unique identifier assigned to each distinct product variant for inventory tracking and management.

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    Key Takeaways

    • Well-designed SKUs encode product attributes (category, brand, size, color) making them self-descriptive and sortable.
    • SKU proliferation increases carrying costs and complexity. Regular rationalization removes underperforming variants.
    • SKUs are internal identifiers. UPC/EAN barcodes are standardized external identifiers for retail and marketplace selling.

    Designing an Effective SKU System

    A good SKU system is logical, scalable, and easy for warehouse staff to interpret:

    • Category prefix: 2-3 characters identifying product type (SH = shoes, TS = t-shirt, EL = electronics).
    • Brand/supplier code: 2-3 characters for brand identification (NK = Nike, AD = Adidas).
    • Attributes: Color, size, material encoded as short codes (BLK = black, LG = large, CTN = cotton).
    • Sequence number: Unique numeric suffix for disambiguation within the same attribute combination.
    SKU Rules

    Never start SKUs with 0 (spreadsheets strip leading zeros). Avoid letters that look like numbers (O/0, I/1, S/5). Never reuse deleted SKUs. Keep total length under 16 characters for barcode compatibility.

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