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SKU (Stock Keeping Unit)

What Is a Stock Keeping Unit?

A Stock Keeping Unit (SKU) is a unique alphanumeric code or identifier assigned to a specific product or item in inventory management systems to track its movement, stock levels, and sales performance within a retail or distribution environment. 

How is Stock Keeping Unit Useful?

SKUs play a critical role in inventory management and merchandising operations by enabling organizations to distinguish between different products, variants, or packages, streamline stock replenishment, and monitor product availability and sales trends across multiple sales channels and distribution locations. By assigning unique SKUs to each product or product variant, organizations can improve inventory accuracy, reduce stockouts and overstock situations, and optimize supply chain logistics and procurement processes to meet customer demand and maximize sales opportunities.

Stock Keeping Unit In Academia 

In academia, SKUs are studied within the fields of supply chain management, inventory control, and retail operations. Researchers investigate SKU definition and classification criteria, such as product attributes, variants, and packaging configurations, to optimize inventory management, forecasting accuracy, and order fulfillment efficiency for retail and e-commerce businesses. Academic studies on SKUs also explore SKU standardization, SKU rationalization, and SKU proliferation management strategies, as well as SKU-level analytics, demand forecasting models, and inventory optimization algorithms to support data-driven decision-making and continuous improvement in SKU management practices and retail operations.

Also, learn about Social Commerce.

Social commerce is the process of selling products and services directly through social media. With social commerce, the entire shopping experience from product discovery and research to checkout, takes place right on social media.

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Frequently Asked Questions On Stock Keeping Unit

What is the purpose of a SKU?

SKU short for the stock-keeping unit, is used by retailers to identify and track its inventory, or stock. An SKU is a unique code consisting of letters and numbers that identify characteristics of each product, such as manufacturer, brand, style, colour, and size.


How do you calculate stock-keeping units?

To calculate the number of SKUs in your inventory, you will need to consider all of the different product variations you offer. This includes variations in color, size, price, and more. The number of SKUs in your online store will be equal to the number of product variations.

Where is SKU written?

Typically, SKU numbers are listed on the product’s packaging usually above the product’s barcode, as seen below. While the 12-digit numeric code on the bottom is the product’s UPC (Universal Product Code), the alphanumeric code at the top is the SKU number (which is different from the UPC).

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