Best SKU Formatting Practices

Having a good idea of how you will be formatting the SKUs for your business is something that isn’t thought about a lot but will help your business A TON. A SKU is a “Stock Keeping Unit” that names your products that you sell in your company. This helps identify not only each of your products but each variant of your products as well.

Now, when looking at your products in inventory, which variables are he most important? Some examples of these variables are things like name, size, description, model, material, color, packaging or other specified parameters.

When arranging your SKU have the first section be the most important factors like what item or brand it is. Then have the last section indicate the variables like the color or size. Once you have some sort of formula for your SKU, make sure to keep that formula throughout all your SKUs. The more straightforward your strategy is, the more efficient this aspect of your inventory management for your business will be. You will want to make sure that you name your SKUs in a way that is very obvious so your staff (or your 3PLs staff) can read and understand the SKU.

Be sure to keep the different sections of the SKU short and simple. Shortening words to keep the SKU short and concise could consist of shortening words like “black” down to just “BK”. Or like for “duffle bag” you could just put “DB”. While doing this, don’t use numbers that can be confused with letters. Numbers like 0 and 1. 0 can be confused with O and 1 can be confused with a capital I or a lowercase l. Keeping this in mind will help people understand your SKUs much more.

So, what is best for your business? There is no right answer other than what you as the business owner believes is the right way for your business. Lean towards simplicity. That doesn’t mean less SKUs. It might actually mean more SKUs. If there are more variants to your product, you should have more SKUs. But once again, this is all up to your business and what works for you. Once your SKUs are set, your inventory management will become easier.