No matter whether you sell clothes, food, or cell phone cases, using SKU codes is essential for your store. But what are SKUs? how are they managed correctly? do I need them? If these questions have ever crossed your mind, stay tuned to this post where you'll find answers to these questions and more!
What is an SKU code?
SKU means "Stock Keeping Unit", that is, it is an identifier created by a set of numbers and letters that serves to reference the products of your store in an individualized way in your catalog.
We could say that it is like the ID of the items in your eCommerce, a code that allows you to identify them to keep rigorous control of the stock and logistics of your business.
What are SKUs for?
As we mentioned before, this article may be of great interest if your task in eCommerce is in the logistics or inventory management department, since the main function of these codes is to eliminate possible mistakes or confusion between products and their variants.
In this sense, SKUs are extremely useful because, through the combination of numbers and letters, they will allow you to identify, locate, and internally track a particular product among all those in your store.
How are they managed?
SKU codes are designed for internal product identification, which means for internal product management. What does this mean? It is not a barcode that is issued by a standards organization, but its function is mostly internally related to inventory tracking, as you can create your format to represent the smallest unit of a product that is marketed.
As for its management, it is usually done through an ERP or order management software. However, it is also possible to use other methods such as the classic Excel to manage your SKUs correctly.
Managing SKUs manually can be a tedious task, especially as your inventory expands. That's where inventory management tools come in. Using software such as Shopify's inventory management system can help streamline SKU tracking and make your operations more efficient.
How do I design my eCommerce SKUs?
Now that you are a little clearer about this concept, you are probably wondering how you can implement an SKU system in your business correctly.
First of all, you should know that SKU architecture should be chosen based on each company's needs, sales priorities, and customer profile.
The SKU format you choose must make sense to your staff, as it is created to streamline their work processes. Don't forget the next tips:
- It must be understandable and simple: each letter and number in your SKU must have a function and your staff must be able to recognize it easily.
- It must be unique for each variant: for a SKU to be really useful, you must use a unique code for each variant for your stock management to be effective. For example, if you sell sneakers with different sizes and colors, each variant must have its own unique SKU code to avoid confusion.
- They should not be too long: a good reference could be to keep your SKUs under 16 characters. However, there is no set length, it will depend on the number of products and varieties your store has.
If I am a small eCommerce... Do I need them?
Perhaps you may consider that your store does not need to keep such detailed control of its stock because it does not have too many references. This is understandable but questionable. Using SKUs streamlines inventory management regardless of the size of your store.
Also, if you have a long-term growth vision for your business, the best advice we can give you is to start managing your SKUs before your stock has grown too large and you don't know where to start.
But, if you're still in doubt, read the benefits of SKU codes for eCommerce.
- You can know immediately if a product is available without having to travel to your warehouse.
- You can track your inventory in detail to anticipate and avoid running out of stock.
- It allows you to easily know which items have better sales or which are selling worse at any given moment.
- It allows you to improve your logistics processes and save time and resources.
Don't hesitate any longer and get started with the SKU management of your store, you won't regret it!
For more insights into managing your Shopify store and improving your eCommerce strategy, check out our latest blog on Shopify Promotions.