What is the full form of SKU?

The full form of SKU is Stock Keeping Unit. It is a product identification code that clearly identifies a product. It aids in the monitoring of a product for inventory purposes. The code is also known as brand identity or a product number, but it is most commonly known as the SKU number.

Working of SKU

SKU is made up of letters and digits. The numbers and letters, such as the name, model number, colour, and so on, provide information about the product.

Each company has its own technique for creating SKUs for its products, and there is no wrong way to create an SKU. With that said, there are a few industry norms to follow when creating an SKU for an item, such as,

• Make each and every SKU unique. Never reuse an SKU, and make sure that each commodity or service has its own SKU.
• Keep SKUs to a minimum. Long SKUs may be difficult to read and thus ineffective in some inventory control systems.
• Should not use any special characters or spaces. Creating SKUs with characters or spaces may cause confusion.
• Should not use letters that could be mistaken for numbers. Avoid using characters that could be misconstrued for 0 and 1, such as O and I.

Significance of SKU

Stock keeping units are extremely important and are commonly utilised by department shops, industries, and product fulfilment centres. Stock-keeping units have various important applications, including the following.

• Identifying a certain product
• Inventory control is used to determine how much of a given product is on hand.
• Assisting in the resolution of brand stock levels
• Recognizing inventory decline
• Identifying the most profitable commodities through research.
• Assisting in the establishment of a product reorder point
• Allowing consumers to save time by finding things quickly.

Example

Consider a specific product a medium-sized pair of black Gucci jeans.

For this product, we can create an SKU as follows.

BLK-MED-G123-GUCCI

Here

• To differentiate specific details regarding the product, a dash (-) is used to
• BLK relates to the product colour, that is, Black
• MED relates to the medium product size
• The model number given by the producer corresponds to G123
• GUC relates to the brand of the product.