SKU stands for Stock Keeping Unit and is a scannable barcode composed by an alphanumeric combination – usually eight digits long – that allows retailers to track their inventory levels and determine the difference between their products. Different products have their own SKUs and the combination is usually based on product characteristics such as price, size, color and many others.

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The SKU can be created manually, but also with the help of online tools that generate the necessary combinations and through inventory management or point-of-sale systems (POS) – which is more recommendable for retailers who have a big number of products in their inventories.  

To be more effective, it is important to make sure that the SKU isn’t just a random combination of digits, but composed of little pieces of information. The first part usually represents general characteristics of the product, such as the department, category and supplier. The next one represents more specific information, such as the product color, size or other sub-categories. Finally, the last digits can be a sequential number.

Despite being similar, the SKU and Universal Product Codes (UPC) are used in different situations. Here, you can find a comparison between them:

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SKU numbers are important because they help you accurately track your inventory so you can identify when you need to renew it. Also, it is a good way to integrate your Ecommerce and its channels, simplifying the identification of your products.