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What is a SKU & How To Create Effective SKUs

Whether you sell a dozen different products or several thousand, tracking and managing inventory is an essential part of managing a Shopify store.

Knowing exactly what you’ve got in stock (and where it’s located) at any given time isn’t simply a matter of logistics; it also has ramifications for marketing, sales, and customer support.

Which brings us to a key element of the inventory management process: the humble SKU.

In this in-depth guide, we’ll explain:

  • What is a product SKU
  • Why SKUs are important
  • How to create and manage SKUs

What is a SKU Number?

A SKU (stock-keeping unit) — pronounced “skew” — is a unique product identifier used to track and manage inventory from supplier to customer.

Up to 12 characters long and comprising letters and numbers, SKUs are specific to each retailer. Different SKU numbers represent different products, based on factors like:

Can Two Products Have the Same SKU Number?

Ideally, no.. You want each product to have its own unique SKU to aid with inventory management.

However, SKUs are internal, so it’s up to you to make them unique. Many platforms such as Shopify do not enforce this.

It’s also totally possible for two separate products to have identical barcodes or UPC numbers.

Confused about the difference between stock-keeping units, barcodes, and UPCs? Let us explain…

SKU vs. UPC Codes

To the untrained eye, SKUs and Universal Product Codes (UPCs) look pretty much identical, but they have different properties and uses:

SKUUPC
Typically from 8 – 12 characters and numbersAlways 12 numbers
Used for internal inventory managementUsed for external tracking and point-of-sale identification
Set by individual retailersStandardized by the Uniform Code Council
Identifies product traitsIdentifies manufacturer and product

Because of these differences, it’s common practice for retailers to utilize both SKUs and UPCs for inventory and sales management, with SKUs used for internal operations and UPCs for external tracking.

It’s also worth noting that UPCs are required to sell products on Amazon, while Walmart requires suppliers use either a UPC or GTIN.

SKU vs. Barcode

A barcode is the series of black lines used by retailers when processing a customer’s order.

Barcodes are essentially a visual, scannable representation of the SKU or UPC (although they aren’t necessarily the same as either).

Here’s how barcodes differ from SKUs:

SKUBarcode
Alphanumeric codeMachine-readable visualization
Customized to meet the needs of the retailerStandardized by bodies like the Uniform Code Council and the Global Standards Organization
Unique product identifiers used for internal inventory managementUsed to identify products at point of sale or during the shipping process
Come in whatever format the retailer choosesCome in different formats, including UPC and European article numbers (EANs)

Like with SKUs and UPCs, it’s not uncommon for businesses to use barcodes and SKUs together, with SKUs handling the internal inventory management side, and barcodes supporting external identification and tracking.

Why Are SKUs Important and What Are Their Benefits?

On a basic level, SKUs help you keep track of stock levels.

But there’s more to stock-keeping units than that. Here are six ways they’re important:

Accurate Inventory Tracking

SKUs give retailers the power of accurate, real-time inventory tracking.

Given that each product has its own stock-keeping unit, businesses can easily determine stock levels on an individual item, helping them understand:

  • When they need to order more stock
  • How much stock to order

Streamlined Operations

Manual stock-keeping is a labor-intensive process. And it’s also highly susceptible to miscounts.

As such, many retailers automate their inventory management using SKUs — such as automatically reordering products when stock levels drop beneath a certain level.

This frees up time for employees to add value in other areas of the business (and also eradicates human error).

Improved Customer Service

Out-of-stock products don’t just affect sales and revenue; they can damage your reputation.

According to one study, three-quarters of consumers feel less loyal to a retailer after encountering product unavailability, while three-fifths feel less confident about continuing to buy from a store experiencing frequent stocks.

Accurate inventory tracking doesn’t mean you’ll never encounter stock issues.

But it does ensure that stock levels displayed on your website are accurate. So they’ll never purchase something, only to be told that the item isn’t actually available.

And the more accurate your inventory tracking, the easier it becomes to give customers a realistic timeline for when sold-out products will be back in stock.

Enhanced Data Analysis

Inventory tracking with SKUs opens the door for improved ecommerce analysis, allowing you to gather data on:

  • Sales trends
  • Inventory turnover rates
  • Customer behavior

This can help you make smarter, data-backed decisions on everything from pricing to promotions.

Better Communication

Given that SKUs are unique to specific items, they give you a simple — and accurate — way to discuss individual products with your supply chain partners and other stakeholders.

Improved Marketing Campaigns

Stock-keeping units also have a bunch of marketing-related applications, allowing you to recommend similar items at the bottom of product pages, on order confirmation pages, and in email and social campaigns.

They also make it easier to track product sales, which helps with tracking the performance of your marketing campaigns.

What’s more, because stock-keeping units are specific to the retailer, if a customer sees the SKU for a T-shirt, they wouldn’t be able to do a Google search to comparison shop that same shirt on a different store.

Displaying the SKU in your e-commerce marketing materials also gives customers a simple way to reference the item. For instance, shoppers viewing this product…

…can easily say: “I’d like to order the FBDO107 T-shirt.”

Як генерувати артикули та штрих-коди

У системі є можливість автоматично генерувати внутрішні артикули на штрих-коди.
Це можна зробити в картці товару або у розділі Робота з товарами
Для товарів з SKU також можна генерувати штрих-коди та артикули для кожної окремої характеристики.

У картці товару це знаходиться на вкладці “Головне”
Можна натиснути на відповідну кнопку генерації і потрібний унікальний номер з’явиться у порожній графі.

А в розділі Робота з товарами , треба виконати наступні дії:
Відсортувати і обрати потрібні товари
Натиснути на “Групові дії”
Обрати генерацію артикулів чи штрих-кодів

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