The SKU number is essential for retailers and manufacturers as it enables them to manage stock levels efficiently. In this Viindoo article, we will explore in detail what an SKU number is, its format, and how it works.
Who uses SKU numbers?
SKU numbers are widely used by businesses involved in manufacturing, distributing, and selling manufacturing, distributing, and selling products. Retailers, wholesalers, and manufacturers commonly use them to track inventory levels, monitor sales, and manage stock effectively. Online businesses like Amazon, eBay, and other e-commerce platforms also use SKU numbers to track inventory and sales.
What is the SKU number format?
The format of the SKU number varies from business to business. However, most SKU numbers consist of eight to twelve characters. The first few characters usually identify the brand or manufacturer, followed by a unique set of characters that identify the product. The last few digits represent the product variant, such as color, size, or style.
For example, let's assume a company called ABC sells t-shirts with different colors and sizes. Their SKU number format could be ABC-001-BL-SM, where:
- ABC: identifies the brand or manufacturer
- 001: identifies the product code
- BL: indicates the color (blue)
- SM: indicates the size (small)
What is the SKU number format?
>>> See more: Top Sku generator Tool That You Must Know
SKU Number Example
Let's take another example to understand SKU numbers better. Suppose you own a clothing store and sell a white t-shirt in different sizes. Your SKU number format for the white t-shirt could be:
| Product | Color | Size | SKU Number |
| T-Shirt | White | S | TS-WH-S-001 |
| T-Shirt | White | M | TS-WH-M-001 |
| T-Shirt | White | L | TS-WH-L-001 |
In this example, the first two characters (TS) represent the product code, followed by the color (WH) and size (S, M, or L). The last three digits (001) represent the product variant.
>>> See more: How to create a SKU number in 4 easy steps
Pros and Cons of Using SKU numbers
Using SKU numbers have several advantages and disadvantages, including:
Pros
- Efficient inventory management: SKU numbers enable businesses to track inventory levels accurately and manage stock efficiently.
- Improved sales tracking: Businesses can use SKU numbers to monitor sales and identify which products are selling well and which ones need improvement.
- Better decision making: By tracking sales and inventory levels, businesses can make informed decisions about product pricing, promotions, and marketing strategies.
- Streamlined operations: SKU numbers can help streamline operations by reducing errors and improving workflow.
Cons
- Time-consuming: Creating and implementing SKU numbers can be time-consuming, especially for small businesses with limited resources.
- Costly: Implementing a new SKU system might require additional resources, such as software and hardware, which can be expensive.
- Complexity: If the SKU number system is too complex, it can be challenging for employees to use and require additional training.
Pros and Cons of Using SKU numbers
Alternatives to using SKU numbers
While SKU numbers are widely used, there are alternatives to tracking inventory and sales, including:
- Barcodes: Barcode systems have become popular in recent years as they offer similar benefits to SKU numbers but are easier to implement and manage.
- Serial numbers: Serial numbers are unique identification codes that are often used in the manufacturing industry to track products through the supply chain.
- RFID: Radio Frequency Identification (RFID) tags are becoming more popular, especially in the retail industry, as they offer real-time tracking of inventory levels.
Alternatives to using SKU numbers
>>> See also: 5 software for point of sale
Tips for creating effective SKU numbers
Here are some tips to create an effective SKU number:
- Keep it simple: The simpler the SKU number, the easier it is to remember and use.
- Make it unique: Ensure your SKU numbers are unique and don't clash with existing products or SKUs.
- Be consistent: Stick to a consistent format for all your SKUs to make it easy for employees to use and manage.
- Make it easy to read: Use clear and legible characters easily scanned or read by employees or software.
>>>> See also: Top 10 best sales management software
FAQs
What is the difference between SKU and UPC codes?
SKU codes are specific to a business or manufacturer and are used internally to track inventory and sales. UPC codes, on the other hand, are universal and are used for scanning at checkout.
Can I change my SKU numbers once implemented?
Yes, you can change your SKU numbers as long as you ensure they remain unique and don't clash with existing SKUs.
Do I need to use SKU numbers if I only sell a few products?
Using SKU numbers is not mandatory, but it can help streamline your inventory and sales tracking, especially if you plan to expand your product line.
How many characters should an SKU number have?
The length of an SKU number can vary, but most SKUs consist of eight to twelve characters.
Can SKU numbers include letters and numbers?
Yes, SKU numbers can include both letters and numbers and can even have special characters depending on the format used.
SKU numbers are essential for businesses involved in manufacturing, distributing, and selling products. They enable efficient inventory management, accurate sales tracking, and streamlined operations. Creating an effective SKU system requires careful consideration and planning, but the benefits can be significant. By following best practices and implementing a consistent SKU format, businesses can manage their stock effectively and make informed product decisions.
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