SKUs (stock keeping units) are codes that you can use internally to track your inventory and report on your sales. 

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 questions from customers about specific products.

SKUs are different from barcodes and UPC codes. For example, although barcodes are unique globally and are issued by a standards organization, you can create your own SKU format and codes for your business.

SKU format

Although you can use any format that you prefer, the following guidelines can help make your SKUs work best for you and your business:

  • Characters - You can use all numbers or a mix of numbers and letters. Avoid a format where the numbers 0 and 1 could be confused with the letters O and I. Don't use special characters, symbols, or spaces because they can cause problems in other computer programs, such as spreadsheet software. However, dashes or underscores are useful because they separate groups of numbers and letters that represent product attributes such as style, color, size, pattern, or even a storage area.

  • Length - Keep your SKUs as short as possible, such as no more than 16 characters. Depending on the number and variety of products you sell, you might be able to use a SKU format that is as short as 4 to 8 characters.

  • Simple and understandable - Use a SKU format that makes sense to your staff and can help with packing orders. Each letter and number in a SKU needs to have a purpose.

  • Unique - For effective tracking and sales reporting, each SKU needs to be unique.

Example SKU formats

  • Juanita has an apparel store and all her products have a brand, style, and size. She chooses to use a ten-digit numeric SKU format of ####-###-###. The digits, separated by hyphens, refer to brand, style, and size. For example, she uses the SKU 4225-776-3234 for pants that are brand 4225, leg style 776 (boot cut), and size 32x34 (waist and length).

  • For his wooden pen business, Karl prefers to sort and store his products by wood type, ink color, and point size. He decides to use an alphanumeric SKU format of ###_###_##. For example, WAL_BLK_25 refers to a pen made from walnut with black ink and a 2.5 mm point.

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