What is Stock Code (SKU)? How to Create a Stock Code (SKU)? | Weeyn - All in One Ecosystem of E-commerce!

What is Stock Code (SKU)? How to Create a Stock Code (SKU)?


Anyone who has purchased something online or read a product description has almost certainly encountered SKUs. Below is the definition of a SKU and their typical uses for an ecommerce business.

What is Stock Code (SKU)? How to Create a Stock Code (SKU)?

When you first start an ecommerce business everything is so new and exciting!

Although the world is your oyster, it is crucial that you delve into some of the most important concepts and strategies. To get started, you need to learn the ins and outs of running an online business, especially in terms of the products you sell.

To keep your inventory organized, you need to develop a coding system. This is where SKUs come into play.

Anyone who has purchased something online or read a product description has almost certainly encountered SKUs. Below is the definition of a SKU and their typical uses for an ecommerce business.

What are SKU Numbers?

SKUs, also known as stock keeping unit numbers, are essentially a series of numbers and letters that represent each product you offer. These codes help you and your team identify the products you sell through your e-commerce store.

Each SKU is unique to each product and in some cases varies only slightly due to minor differences. For example, if you own an online clothing store, you might offer a shirt style in three colors (blue, red, and black). In this case, the SKU may be the same except for a slight color change on the end.

As a general rule: Your SKUs should include important information based on the product's most important features, such as price, style, brand, color, type, or size.

Please note: SKU is not the same as UPC (universal product code). For example, if you sell the same product as another company, your products will have the same UPC numbers, but your product SKUs will be unique to your business.

Why Are SKUs Important?

Creating SKUs for your ecommerce store is important for several reasons. That's why you should get into the habit of creating and editing a SKU list from the very beginning. Ultimately, the more automation you can do from the start, the better.

You will be able to track stock more effectively by assigning a product code to each product you offer. This includes how many items have been sold, how many are currently in stock, etc. will help you determine. Knowing availability is imperative when it comes to effective customer service and overall growth.

Accordingly, each unique SKU will support inventory counts that must be performed at regular intervals. This will help you make sure your current stock levels match those recorded in your inventory management system. This is especially beneficial from a tax perspective.

Whether you want to better understand all aspects of business analytics to help you understand what is being sold to whom or you want a more effective system for replenishing stock, SKUs are the way to go. By following SKU trends, you will be able to gain more control over your product line, allowing you to focus more on the products being sold.

The Importance of SKUs for Vendor-Vendor Relationships

Because your SKUs will be used internally (unless printed anywhere on the product packaging), your customers may never see them. But when it comes to your supplier partners, having an effective SKU system will allow for smoother and more efficient communication.

As your business grows, you'll likely start working with more suppliers. By effectively implementing SKUs, managing your inventory becomes much easier; This is especially true in terms of forecasting. If a retailer can predict potential demand based on how quickly certain SKUs are selling, they can communicate their needs more efficiently.

In turn, all associated difficulties are minimized for both you and your supplier. SKUs make for a more streamlined process, whether that means you can more effectively negotiate your desired time frames or decide whether you can meet the minimum requirements.

How are SKUs created?

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

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

Or a bottle of Tropicana orange juice, without the pulp variety, in an 89-ounce plastic bottle, may be offered by a corner stand with a SKU that reads TROP-NP-PLAS-89.

There is no set way to create a SKU, but companies developing their own system will want to have a method that everyone will follow and understand so that the code is easy to decipher. SKUs must be human readable; This means you don't need any equipment to read and break down the code.

Where SKUs are used

You'll often find SKU used in the following areas:

retail stores
Product fulfillment centers

What is not a SKU?

Although SKUs are sometimes thought of as synonymous with UPC barcodes, they are different. SKU is an internal code that any business can create for itself; UPC is determined by whoever sells the product.

Free 15-Day Trial Opportunity!

Take the First Step into E-Commerce with a

Free 15-Day Trial Opportunity!

Entering the world of e-commerce is now much easier! Grab your chance to grow your business with Weeyn in the online world with our free 15-day trial.

Start immediately