Contents
- What is SKU?
- Where is SKU code used?
- Functions of SKU: what is it for?
- Differences between SKU and barcode and article number
- How to create and decode SKU identifiers?
What is SKU?
SKU (Stock Keeping Unit) is a unique code used to describe a specific item in a product assortment. This code is necessary for the accurate identification of a product in accounting systems. The term "SKU" is widely used in trade and marketing; its full name translates to "stock keeping unit." SKU systems allow not only to organize all items in the assortment but also to control inventory and analyze product movements.
SKU codes are typically placed on price tags, packaging, and product catalogs. In most cases, the code itself encodes information describing the product, including name, brand, size, volume, and other important characteristics. For example, the identifier may describe not a specific juice box, but the product as a whole, such as "Tasty Juice, orange, 1 liter, batch from December 2024." The creation of the identifier depends on accounting needs and the characteristics of the product as determined by the company itself.
Often, SKU is used to denote a unit of assortment or a trade offer without linking it to any specific code. For example, a company may have one product—a women's baguette bag—available in white, green, and purple colors, which accordingly creates three different SKUs.
Where is SKU code used?
The SKU identifier is actively used by companies with a large assortment of goods and high turnover. Its usage encompasses almost all sectors, including:
- Manufacturing
- Warehousing
- Wholesale trading companies
- Retail stores
- Online stores and marketplaces
For example, in Ozon, all incoming goods receive a unique SKU. The FBO code is assigned to products sold from Ozon’s warehouse, while the FBS code is for products sold from the seller's warehouse.
Functions of SKU: what is it for?
SKU is a universal tool that simplifies warehouse operations and helps manage assortment, sales, purchasing, and production. The SKU code helps:
- Keep track of inventory: simplifies the organization of storage, control of arrivals, stock levels, and product movements. Warehouse staff can quickly scan products using mobile terminals, transmitting data to the accounting system.
- Simplify and speed up data exchange: information about products is quickly transferred between various systems, including accounting, warehousing, online stores, and cash register applications.
- Analyze sales and turnover: coding helps identify popular categories and models, as well as study consumer preferences.
- Plan marketing activities: SKU allows tracking sales during promotions and adjusting marketing strategies.
- Increase merchandising efficiency: by structuring product data, SKU helps plan layouts correctly and avoid losses.
If the identifier encodes information about expiration dates, it simplifies the control of perishable goods, as merchandisers do not have to manually check each package.
Differences between SKU and barcode and article number
Barcode, article number, and SKU are different identifiers that help recognize products. Let's look at their differences:
| Parameter | Barcode | Article Number | SKU Code |
|---|---|---|---|
| Standard Format | International | Developed by the company | Developed by the company |
| Format | Graphic, numerical | Numerical, textual | Numerical, textual |
| Mandatory | Assigned to all products by law | At the company's discretion | At the company's discretion |
| Encoded Data | Contains country code, manufacturer, and check digit | May be a simple set of numbers | Contains information about product characteristics |
| Use | For product identification | For product identification in catalogs | For tracking products in accounting systems |
The main difference between an article number and an SKU code lies in the presence of encoded information about the product. Often, terms are used interchangeably, although in practice they may have different meanings.
How to create and decode SKU identifiers?
SKUs are used internally within a company, and only employees with the appropriate software or instructions can decode the identifier. The process of creating a SKU includes several steps:
- Define the hierarchy: create a list of characteristics and categories to be encoded.
- Develop a notation standard: determine a set of letters or numbers for each characteristic.
- Avoid duplicates: each SKU code must be unique, not overlapping with codes from other categories.
- Integrate SKU into the accounting system: use special programs to generate identifiers.
- Set up equipment: install printers and scanners for working with codes.
- Train employees: conduct training for working with the SKU code system.
By following these steps, companies can effectively use SKUs to manage their assortment and optimize accounting processes.