What is a SKU number? This question is crucial for any business, whether handling 5 or 500 products. SKUs are vital tools that facilitate inventory management, provide insight into inventory levels and sales data, and enhance customer experience. The process of creating and utilizing SKUs varies among brands, and without a clear understanding of their purpose, their implementation can become complex. This article of Worldcraft Logistics delves into the definition of SKU numbers, their discovery and creation process, best practices for managing them, and choosing an effective 3PL partner for efficient overall handling.

1. What is SKU numbers?

In the retail industry, the term "SKU" or "SKU numbers" an acronym for "stock keeping unit" is frequently mentioned but not always fully understood. It is a unique alphanumeric identifier, generally comprising eight digits, that retailers allocate to individual variants of a product. This system is essential for tracking internal stock quantities. Each variation of a product, whether in color or size, receives a distinct SKU number. This method allows for accurate and efficient inventory management, enabling retailers to quickly identify and monitor stock levels, aiding in restocking decisions and sales analysis.

2. Where do you find a SKU number?

SKU numbers, a key component in retail, are found in various locations, both visible to customers and used internally. Commonly, SKU numbers appear on a product's packaging, typically positioned above the barcode. Unlike the 12-digit numeric UPC (Universal Product Code) at the bottom, the SKU is an alphanumeric code at the top, distinct from the UPC. Additionally, SKU codes are often found on price tags for items like clothing, frozen foods, toys...

In brick-and-mortar stores, it's not uncommon to see SKU numbers displayed on the shelves where the products are located, rather than on the product itself. This practice aids retail workers in efficiently managing and locating in-store inventory. However, it's important to note that not all products have SKU numbers. If a product lacks an SKU on its packaging or tag, it may not have been assigned one yet or might be listed exclusively online. This flexibility in SKU placement and usage underscores their role in organizing and tracking retail items.

Can you find the SKU code for products online? 

To locate the SKU number for products online, you should start by visiting the product page on the retailer's website. Often, the SKU is included in the product's description or among other details provided there.

It's crucial to understand, though, that the SKU visible to customers might differ from the internal SKU used by the brand. The internal SKU is typically utilized for organizing products in storage and managing restocking processes. This means that while the customer-facing SKU helps in identifying products on the website, the internal SKU serves more logistical and inventory management purposes within the company.

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3. In e-commerce, how do SKU numbers work?

SKU numbers are unique identifiers used in e-commerce and retail to manage and track inventory. Here's how they work:

3.1 Unique Identification

Each SKU is a unique code assigned to a specific product, allowing businesses to track inventory levels, sales, and order fulfillment accurately. Unlike universal product codes (UPCs), which are standardized for the same product across different stores, SKUs are specific to each company.

3.2 Structure

SKUs typically consist of alphanumeric characters. The structure is often logical and systematic, allowing for easy identification and organization of products. For example, a SKU might include abbreviations for product SKU: type, size, color, and other relevant attributes.

3.3 Inventory Management

SKUs are essential for inventory management. They help businesses keep track of how many units of each product are available in stock, which items are selling quickly, and when to reorder products.

3.4 Sales Analysis

SKUs enable detailed sales analysis. Retailers can identify trends, popular products, and customer preferences based on SKU data. This information is crucial for decision-making regarding marketing, promotions, and stock levels.

3.5 Order Fulfillment

In e-commerce, SKUs are integral to order fulfillment. They help in quickly locating items in a warehouse and ensuring that the correct products are shipped to customers.

3.6 Customization

Businesses can customize their SKU systems to suit their specific needs and inventory types. This flexibility allows for a high level of detail and organization in product management.

3.7 Integration with POS and E-commerce Platforms

SKU numbers are integrated into point-of-sale (POS) systems and e-commerce platforms, enabling seamless transaction processing and inventory updates.

3.8 Avoiding Confusion

Having unique SKUs for each product variation (such as size or color) prevents confusion in order processing and inventory management.

In summary, SKU numbers are a powerful tool for managing inventory, analyzing sales, and streamlining operations in e-commerce and retail. Their unique and customizable nature makes them an essential component of modern business operations.

4. Instructions for creating SKU numbers for products

SKU numbers consist of capital letters and numerals and often begin with letters. It is advisable to avoid using zeros as they can be confused with the letter O. Similarly, the number one and the letter I can be easily mistaken for each other. Avoid using special characters in your SKUs. However, you can use hyphens to separate number sets within an SKU, for example, 678-123-654. Each product in your system should have a unique SKU.

Every character in an SKU should have significance. Each letter and number should represent a characteristic of the product that is important to you.

For instance, if you sell two types of shirts - One for the office and one for going out - your SKU numbers might start with 'OF' for shirt the office and 'GO' for shirt going out, reflecting the most significant aspect of each product. The remainder of your SKU can include information like the manufacturer of the glass, its size, and other identifying details. For example, "OF01BLA-S" could the office shirt (size S), color: Black, model 01,...

When creating SKUs, focus on the product attributes that are most important to you and your customers. For clothing, use distinct SKUs for different sizes. For products with printed designs, use the SKU to specify the pattern.

You can manually generate SKUs and maintain them in a spreadsheet. However, if you have a large inventory, you might prefer using a free SKU generator, such as the one provided by BigCommerce, 3Dsellers, Primaseller...

5. Examples of SKU numbers

Here are some examples of how SKU numbers might look:

• Electronics Store: For a laptop, the SKU might be something like LAP1234B. The 'LAP' could stand for laptop, '1234' is a unique number, and 'B' might indicate the color, such as black.
• Clothing Retailer: For a shirt, the SKU might be SHRT5678M. 'SHRT' could stand for shirt, '5678' is a unique identifier, and 'M' might indicate the size medium.
• Grocery Store: For a pack of apples, the SKU might be APPL90ORG. 'APPL' could signify apples, '90' is a unique number, and 'ORG' might indicate that they are organic.
• Home Goods Store: For a set of bed sheets, the SKU might be BEDS123QUEEN. Here, 'BEDS' could stand for bed sheets, '123' is a unique identifier, and 'QUEEN' indicates the size.
• Bookstore: For a novel, the SKU might be NOV4567HC. 'NOV' could stand for novel, '4567' is a unique identifier, and 'HC' might indicate a hardcover edition...

Each retailer or manufacturer can have their own system for creating SKU numbers, so they can vary greatly in format and length.

6. Is Worldcraft Logistics's SKU management effective for businesses?

Creating and managing SKUs can be demanding in terms of time and resources. However, collaborating with a technologically equipped third-party logistics provider like Worldcraft Logistics can streamline this process. This partnership enables businesses to concentrate on their main strengths while saving time.

Worldcraft Logistics offers several advantages for outsourcing inventory storage and order fulfillment:

• Real-Time Inventory Viewing: Worldcraft Logistics’s software provides real-time tracking of inventory levels across its fulfillment centers, offering updated data anytime.

• Inventory Management and Forecasting: It allows for a more precise understanding of inventory levels and trends, aiding in forecasting demand and making informed supply chain decisions.

• Enhanced Customer Satisfaction: Over time, this leads to improved customer satisfaction by reducing stockouts and backorders.

• Automatic Reorder Notifications: The software notifies you when inventory reaches the reorder threshold, simplifying SKU tracking and optimizing replenishment timing.

• Customizable SKU Packaging: Worldcraft Logistics’s dashboard allows for the customization of packaging and shipping details for each SKU, adapting the packing process to specific product types.

These features collectively streamline SKU management, allowing businesses to function more efficiently and responsively to customer needs.

7. SKU number and FAQs

An SKU number is a unique code that identifies a specific product in inventory management. Here are some frequently asked questions (FAQs) about SKU numbers:

How is an SKU number different from a UPC or barcode?

An SKU is specific to a store or company, while a UPC (Universal Product Code) is a standardized barcode used universally across different retailers.

Can SKU numbers be the same for different products?

No, each product has a unique SKU to ensure precise tracking and management.

How are SKU numbers used in online retail?

In online retail, SKU numbers help in managing e-commerce inventory, processing orders, and analyzing sales data.

Do SKU numbers help in forecasting?

Yes, SKU numbers enable businesses to track sales trends and forecast future demand for specific products.

In conclusion, SKU numbers, as discussed by Worldcraft Logistics, play a pivotal role in efficient inventory management. These unique codes are essential for retailers and businesses in tracking and organizing their product inventory. Worldcraft Logistics emphasizes the importance of SKU numbers in enhancing operational efficiency, from simplifying tracking processes to aiding in accurate demand forecasting and efficient reordering. Understanding and utilizing SKU numbers effectively can be a game changer for businesses aiming for streamlined operations and success.