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What does SKU Mean?

A SKU, also known as a stock keeping unit, is a unique identifier used by retailers to track and manage their product inventory. A SKU is essentially comprised of three parts: the manufacturer’s code or ID, a sales classifier, and an item number. Each part serves an important role in helping retailers to efficiently keep track of their products, monitor their inventory levels, and interact with their customers.

What are the Benefits of using a SKU?

One benefit of using a SKU system is that it allows retailers to connect directly with suppliers to receive real-time updates on new products and changes to existing stock. This can be especially useful for businesses that engage in seasonal buying or purchasing large quantities at once. Additionally, a SKU system makes it much easier for retailers to create detailed sales reports and analytics that can help them spot trends and make more informed business decisions. SKU’s are also critical when working with a third party fulfillment company so that they can fulfill your orders.

How to create a SKU number?

Creating SKU numbers can be done in two ways: manually, or automatically by using POS software. Most retailers include information within the SKU to help identify attributes such as style, gender, color, and size. These unique attribute identifiers are placed within the SKU for easy identification. For example, the first three characters in a number might signify the brand of product; the next two might denote color; and so on. When used correctly, SKUs can be a helpful tool for managing inventory for any retailer.

Types of SKU Identifiers

SKU attribute identifiers are important for inventory management and tracking. There are many different types of SKU identifiers (some noted above) that can be used, depending on the needs of the business.

• Store location identifiers can be useful for businesses with multiple retail outlets, helping to track which products are being purchased in each location.
• Department identifiers can help businesses to segment sales data by department, allowing them to identify areas of opportunity.
• Variation identifiers are used to identify unique product variations, such as different sizes, colors, or styles.

By understanding the different types of SKU identifiers available, businesses can choose the best option for their needs.


SKU and UPC codes are used to identify different aspects of products in the retail industry. SKU codes, or stock keeping units, are assigned by a manufacturer to their products in order to track inventory levels and monitor sales trends. UPC codes, or Universal Product Codes, are standardized 12-digit product codes that manufacturers acquire from the Global Standard Organization. These codes allow retailers to quickly identify a product and its price when scanning at checkout. While both SKUs and UPCs serve important roles in the retail industry, SKUs tend to be more flexible than UPCs due to their ability to contain additional information about a product such as vendor information or sale prices.

If you need sku management, give us a call. We provide all of our clients with technology that allows our customers to set automatic reminders to order more inventory when their threshold is met. To learn more about all of our services contact us today.