Glossary

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Stock Keeping Unit (SKU)

Stock Keeping Unit (SKU)

Stock Keeping Unit or SKU is a number that is allocated to a product to track it in the inventory. In other words, a stock keeping unit is a unique identifier given to each product for easier and more efficient record-keeping. It is a scannable code that is often printed on the labels to manage inventory. Merchants can see which items are the hot-selling ones and which are sold less. Stores that sell multiple items keep different SKUs for different items. SKUs can be made using the details of the product like- gender for which the product is manufactured, category of the product, size of the item, the color of the product, type of the product, name of the good, its price, and the code.   

How to construct an SKU Unit

Let us consider that we have to create an SKU for a T-shirt that is blue in color, and its size is medium. Therefore, we can create the SKU as BLU-TEE-MED-C234. Here, 

  • BLU stands for the color blue
  • TEE means that it is a T-shirt. 
  • MED stands for the size medium.
  • C234 is the manufacturer’s code for the particular item. 

The SKU here tells the most important specifications of the product which helps in managing the inventory. 

Importance of SKU Codes

1. Accurate Inventory Control

Stock Keeping Units help to maintain inventory records up to date, which enables us to maximize profits and achieve the business goal. If we have fewer stocks, we might lose on orders. Meanwhile, if we maintain high stocks then our money cannot be put to other uses. Therefore, we should stock in accordance with the demands of the particular products. 

2. Forecasting of Sales

With the help of a stock-keeping unit, you can easily see which products are selling fast, or which are selling slow. It becomes easy to foresee the requirements of stock and maintain it accordingly through the stock keeping unit.  

3. Facilitating Quick Shipment

SKUs help in finding the required product quickly. The product can be found by the warehouse keepers with precision. Whenever you need to find a product, you just simply have to check the database and you will get to know about its availability. If it is there in your inventory, you will also be able to know the exact location of the product. 

4. Better Customer Service

With the help of SKUs, you can solve the queries of the customers quickly. You can easily present the customer with the product he/she wants when SKUs are in place. It helps in finding products, comparing and showing similar products, etc. 

5. Earning Greater Profits

Stock Keeping Unit Numbers can help you to increase your profits. It has various features that let you convince the customer to make a purchase. For example, you can recommend a similar products. You can strategically maintain your inventory for higher sales.

free conversion rate optimization audit


Stock Keeping Unit or SKU is a number that is allocated to a product to track it in the inventory. In other words, a stock keeping unit is a unique identifier given to each product for easier and more efficient record-keeping. It is a scannable code that is often printed on the labels to manage inventory. Merchants can see which items are the hot-selling ones and which are sold less. Stores that sell multiple items keep different SKUs for different items. SKUs can be made using the details of the product like- gender for which the product is manufactured, category of the product, size of the item, the color of the product, type of the product, name of the good, its price, and the code.   

How to construct an SKU Unit

Let us consider that we have to create an SKU for a T-shirt that is blue in color, and its size is medium. Therefore, we can create the SKU as BLU-TEE-MED-C234. Here, 

  • BLU stands for the color blue
  • TEE means that it is a T-shirt. 
  • MED stands for the size medium.
  • C234 is the manufacturer’s code for the particular item. 

The SKU here tells the most important specifications of the product which helps in managing the inventory. 

Importance of SKU Codes

1. Accurate Inventory Control

Stock Keeping Units help to maintain inventory records up to date, which enables us to maximize profits and achieve the business goal. If we have fewer stocks, we might lose on orders. Meanwhile, if we maintain high stocks then our money cannot be put to other uses. Therefore, we should stock in accordance with the demands of the particular products. 

2. Forecasting of Sales

With the help of a stock-keeping unit, you can easily see which products are selling fast, or which are selling slow. It becomes easy to foresee the requirements of stock and maintain it accordingly through the stock keeping unit.  

3. Facilitating Quick Shipment

SKUs help in finding the required product quickly. The product can be found by the warehouse keepers with precision. Whenever you need to find a product, you just simply have to check the database and you will get to know about its availability. If it is there in your inventory, you will also be able to know the exact location of the product. 

4. Better Customer Service

With the help of SKUs, you can solve the queries of the customers quickly. You can easily present the customer with the product he/she wants when SKUs are in place. It helps in finding products, comparing and showing similar products, etc. 

5. Earning Greater Profits

Stock Keeping Unit Numbers can help you to increase your profits. It has various features that let you convince the customer to make a purchase. For example, you can recommend a similar products. You can strategically maintain your inventory for higher sales.

free conversion rate optimization audit