A unique alphanumeric code assigned to each product for tracking
SKU stands for Stock Keeping Unit, a unique alphanumeric code that businesses assign to each distinct product or variant in their inventory. An SKU identifies a specific item based on attributes like brand, size, colour, and type, making it easy to track, manage, and locate products. Unlike barcodes, which are standardised globally, SKUs are created internally by the business and can follow any naming convention. For Indian small businesses, using SKUs simplifies inventory counting, speeds up billing, reduces errors in order fulfilment, and improves stock report accuracy. A well-designed SKU system helps you quickly identify products, track sales performance by variant, and manage purchasing decisions. For example, a clothing store might use SKUs that combine category, brand, size, and colour codes. SKUs are essential when using inventory management software, as they allow the system to distinguish between similar products and provide accurate stock levels for each variant.
A footwear shop in Pune creates SKUs for its products. For a Nike running shoe in black, size 9, the SKU might be SHOE-NIK-RUN-BLK-09. If the same shoe comes in white, the SKU would be SHOE-NIK-RUN-WHT-09. This way, the owner can instantly see that the black size 9 has 12 pairs in stock (worth Rs. 72,000 at Rs. 6,000 each), while the white size 9 has only 3 pairs left (worth Rs. 18,000) and needs reordering.
A good SKU should be short (8-15 characters), human-readable, and follow a consistent pattern. Start with a category code (2-3 letters), then brand (2-3 letters), then variant details like size and colour. For example, a clothing shop might use TSH-NIK-L-BLU for a Nike large blue t-shirt. Avoid using special characters, spaces, or starting with zero.
No. An SKU is an internal alphanumeric code you create to identify product variants within your business. A barcode is a machine-scannable visual pattern (usually numeric) used for quick scanning during billing. A single product can have both — the SKU for internal tracking and a barcode for scanning. Your inventory software maps them together so scanning the barcode fetches the SKU and all product details.
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