Stock Keeping Unit (SKU)

SKU is a unique code comprising letters and numbers that determine characteristics about each product, such as manufacturer, brand, style, color, and size. Many business owners use SKUs for inventory tracking and storage. Many also label their products with stickers that show the SKU for easier exchanges and returns, or to handle queries from customers about specific products.

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

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

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

You can use SKU in warehouses, retail stores, catalogs, e-tailers, product fulfillment centers.