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- SKU codes are unique alphanumeric identifiers used to distinguish one product variant from others in your warehouse, optimizing tracking and management.<\/li>\n
- SKUs and UPCs are not the same; SKUs are specific to your company, while UPCs are universal and remain the same across all retailers.<\/li>\n
- Proper use of SKUs improves accuracy in inventory management, enables inventory sharing across multiple channels, speeds up order picking, enhances packing and shipping processes, and improves customer service.<\/li>\n
- SKUs help reduce backorders, incorrect orders, and shipping delays, enhancing overall customer satisfaction.<\/li>\n
- Creating your own SKUs specific to your business needs can help avoid confusion and streamline operations. The use of a SKU generator can simplify this process.<\/li>\n<\/ul>\n
The organization is an essential piece of inventory warehouse management. Your business can\u2019t get very far if you don\u2019t know what inventory you have. Defining SKU numbers is the very first step for a successful fulfillment business.<\/p>\n
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This is true whether you run an ecommerce shop, a warehouse, a brick-and-mortar store, or an omnichannel<\/a> operation.<\/p>\n
\nHere\u2019s what we\u2019re covering in our SKU guide to help you build a lean and profitable business:<\/p>\n
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- What is an SKU Code?<\/a><\/li>\n
- The difference between SKU and a UPC<\/a><\/li>\n
- The top benefits of using SKUs<\/a><\/li>\n
- How you can generate your own SKUs<\/a><\/li>\n
- Download our free SKU Generator Excel Template<\/a><\/li>\n<\/ol>\n<\/div>\n
What is an SKU Code?<\/h2>\n
SKU stands for Stock Keeping Unit. It\u2019s an alphanumeric code between 8-12 characters that distinguishes one product variant from any others in your warehouse. This unique internal code allows retailers to keep track of their products.<\/p>\n
The strength of an SKU lies in its uniqueness. Because it\u2019s specific to your business, you can tailor the code to what customers or vendors ask most often about your product. Your customer\u2019s needs and questions can help form your SKU designations.<\/p>\n
This can include basic information, such as:<\/p>\n
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- \n
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- Gender<\/li>\n
- Brand<\/li>\n
- Size<\/li>\n
- Type<\/li>\n
- Color<\/li>\n
- And more<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
You can include whatever you find most important about your product in the SKU to differentiate it from the other inventory.<\/p>\n
![\"SKU](\"https:\/\/f.hubspotusercontent30.net\/hubfs\/3469233\/Images\/Emails\/Blog\/SKU%20Number%20Everything%20You%20Need-AETBLTW7BL-%20400x.jpg\")
<\/p>\nSKU vs. UPC: What\u2019s the Difference?<\/h2>\n
Many people use SKU and UPC codes interchangeably, but they serve two distinct purposes for retailers.<\/p>\n
UPC stands for Universal Product Code. This is a 12-number code number given to the manufacturer and is more general than an SKU barcode. The Global Standards Organization issues UPCs. UPCs help companies identify the manufacturer of a product.<\/p>\n
Basically, a UPC will always stay the same, while an SKU is specific to your company.<\/p>\n
![\"USKU](\"https:\/\/f.hubspotusercontent30.net\/hubfs\/3469233\/Images\/Emails\/Blog\/USKU%20Number%20Everything%20You%20Need-PC%20barcode%20SKU%20-400x.png\")
<\/p>\nLarger companies sometimes opt to only use the UPC, but most companies find it useful to have both unique SKU and UPC. SKUs give more specific information about the product, while UPCs have more general information.<\/p>\n
If something in a specific batch of products at the factory was compromised, for example, the UPC code is helpful to track down exactly where it went. However, an SKU can help determine where the product is within your inventory.<\/p>\n
Top 7 Reasons Why You Need to Use SKUs<\/h2>\n
The logistics of retail can be tough. If incorrect or delayed orders plague your operations, your customer will seek out your competitors. Businesses must find any way to stand out from the competition. SKUs can give you the edge you need to be fast, efficient, and get a better understanding of your inventory and customer.<\/p>\n
Here are just a few reasons why you should use SKUs in your warehouse inventory management software<\/a>.<\/p>\n
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1.More Accurate Inventory Warehouse Management<\/h3>\n
Inventory is a tricky game. On one hand, overstocking on a product can seriously cut into profit because your carrying costs will increase. That\u2019s capital you could\u2019ve used on more popular products. However, going out of stock can mean a severe loss of potential business.<\/p>\n
When you have a smaller amount of orders, it\u2019s not as stressful to keep your inventory numbers updated in Excel and across your selling channels. However, there\u2019s still more room for error since the data is being entered manually.<\/p>\n
Each time a customer creates an order, and that order moves to the next step in your fulfillment process, you have to update your numbers. You don\u2019t want a customer placing an order for inventory that appears in stock, but will actually have backorder<\/a> status.<\/p>\n
In order to execute lean operations without actually going out of stock, inventory needs to be as accurate as possible. Unique SKUs can help you know exactly what you have and let you know when the product needs to be reordered. You can get a real-time look at your inventory with incredible accuracy.<\/p>\n
2. Inventory Sharing Across Multiple Channels<\/h3>\n
SKUs help you avoid overselling and keeping you from missing a sales opportunity across online stores and retail stores. With unique SKUs, you can share your inventory across all of your online stores, which means your available inventory will constantly be updated, in real-time. You can share your inventory across all sales channels(Retail stores, shopping carts, marketplaces etc), so there is no need to reserve inventory for just one. This means more sales opportunities for you, and more accuracy across all channels. It\u2019s a win-win.<\/p>\n
3. Faster and More Accurate Order Picking<\/h3>\n
Once your customer places an order, the shipment needs to go out quickly. In this Amazon era, customers have very little patience when it feels like their order is taking too long to be shipped. Many warehouses struggle to keep up with the pace of their customer expectations.<\/p>\n
SKUs can help warehouses find what they need even more efficiently. They allow workers to find the exact product that they need with both speed and accuracy, which is required to keep up with customer demand.<\/p>\n
As we mentioned, SKUs can be particularly helpful for products that have variants like color or size. For example, let\u2019s say you have the same type of wrench, and you carry them in 15 different sizes. Looking for an SKU versus checking sizes will help your picker get that order to an order packing station<\/a> faster. When you carry many variations of the same product, SKUs can help your pickers discern which is needed for an order faster.<\/p>\n
Not only can they move faster, but the insight the SKUs give will help you to design a warehouse that is easier to navigate<\/a>. You can put the best-selling items in the easiest-to-reach places and move slower inventory to the back. They can help you to identify where each item should go because you have a better understanding of what sells best.<\/p>\n
4. Efficient Packing and Shipping<\/h3>\n
Not only will picking orders be easier, but the packing process is faster with SKU barcodes. Simply by scanning the barcode<\/a>, you can automatically print out the order packing slip<\/a> and shipment barcodes. This will create a more accurate inventory warehouse management and shipment, and a smoother process all around.<\/p>\n
If a faster and easier packing and shipping process is something you want for your business, schedule a Logiwa demo today!<\/a><\/p>\n
SKUs allow you to create a more digitized process with a warehouse or order fulfillment software<\/a> to save time. When you scan the barcode to send off a shipment, your inventory numbers can be updated as well if you have an integrated system. Of course, you need to design, create barcodes by using a barcode generators app or a WMS warehouse software.<\/p>\n
No more mistakes about products you didn\u2019t know were sent out earlier in the day. You can get up-to-date inventory levels right away.<\/p>\n
<\/p>\n
FREE DOWNLOAD:<\/strong> Ready to get started? Download our Excel SKU Template<\/a> and start creating SKUs for your products today.<\/p>\n
5. Accurate Cycle Counting<\/h3>\n
Some warehouses strive to keep as accurate inventory<\/a> as possible with cycle counting<\/a>. It\u2019s less disruptive to daily operations and allows warehouse managers to ensure that they keep accurate inventory between scheduled full physical inventory counts.<\/p>\n
SKU barcodes are essential to cycle counting. They directly affect the performance and accuracy of the counting process in your warehouse. The more thorough the SKU system, the faster and easier it is for cycle counting to take place.<\/span><\/p>\n
6. Reduce Backorders, Incorrect Orders, and Shipping Delays<\/h3>\n
Have you ever walked into a shoe store and asked an associate for a specific size only to have them disappear for long amounts of time? Then they return to tell you that that specific size is out of stock?<\/p>\n
It\u2019s a frustrating experience for customers to wait around only to be told that the item they want isn\u2019t there. SKUs help you to respond to your customer\u2019s needs with speed and accuracy.<\/p>\n
Through integration with point-of-sale systems, salesperson (whether B2C or B2B) can quickly respond to customer questions.<\/p>\n
SKU barcodes won\u2019t just help you respond quickly, but you\u2019ll be able to minimize, and even potentially eliminate, your backorder<\/a> situations.<\/p>\n
These factors all result in increased customer satisfaction with your business. If there does come a time when you do have items that are out of stock, this underlying sense of brand loyalty will help you keep customers that you might otherwise lose to your competitor.<\/p>\n
7. Better Suggestions for Your Customers<\/h3>\n
You can use SKUs to recognize product characteristics that help your sales team identify additional items that your customer might want. They could also suggest alternatives when what your customer wants isn\u2019t available.<\/p>\n
They can help give you valuable insight into the particular type of item that they want and help you quickly identify alternatives that will keep them happy.<\/p>\n
This can also be done online too. Many online stores will offer suggestions for additional items that you might like, either as complementary to the item you\u2019re looking at or as an alternative. This is typically done by applying an algorithm to the retailer\u2019s SKUs to come up with similar items.<\/p>\n
- The difference between SKU and a UPC<\/a><\/li>\n
- What is an SKU Code?<\/a><\/li>\n