What is a SKU anyway? SKU stands for “Stock Keeping Unit”. It’s basically an alphanumeric product code that helps you track and search your inventory.
The SKUs that you create are important for not only your company but also for any company that works with or handles your product (think about any manufacturer, warehouse, or shipping and fulfillment companies you work with). For this reason, it’s important that every SKU you create is easy to understand, consistent and very specific.
Likely, your fulfillment partner handles thousands of different products. The easier your SKUs are to understand, the easier it will be for them to handle your products. This helps them to avoid mis-ships and to more accurately keep inventory. In the end, this leads to happier customers, a healthier relationship with your fulfillment partner and accurate inventory reporting that allows you to efficiently restock.
In other words, less headache and more bang for your buck.
Even if your company is small now and for the time being, your employees are the only people who will deal with your product, it’s best to start off right. Carefully creating SKUs now, will assure that you are prepared for growth and don’t need to revise your entire system later when it starts causing problems.
I’ll walk you through the most important things to remember as you create SKUs for your products.