SKU

A stock keeping unit: the unique code that identifies one specific item you track.

Also known as: Stock keeping unit

A SKU (stock keeping unit) is the unique code your business uses to identify one specific item. You use it to record the item's on-hand quantity, location, movements, and cost.

SKU vs product

A product is what customers see; a SKU is what you store. The same shirt in three sizes and two colors is six SKUs, because each combination is a separate thing to count. Keeping one SKU per distinct, countable unit is what makes quantities trustworthy.

Good SKU habits

• Keep it short and stable. Changing a SKU later breaks labels and imports.
• Do not encode everything. A code that tries to describe category, size, color, and supplier in eight characters is hard to read and harder to change.
• One SKU, one barcode. If you print labels, tie each SKU to a single barcode so scanning is unambiguous.

Once items have clean SKUs, see how to prioritize them with ABC analysis.