Stock Keeping Unit

A Stock Keeping Unit (SKU) is a unique identifier used by businesses to track and manage individual products in their inventory. Each SKU represents a specific product variant—such as size, color, model, or packaging—so even similar products have different SKUs if any attribute differs. SKUs are alphanumeric codes created internally by companies and are used in inventory systems to track stock levels, sales, reordering, and logistics. In short, a SKU enables precise product identification at a granular level.

How is a SKU different from a barcode?

A SKU is an internal code created by a company to manage and identify products within its own inventory system, while a barcode is a standardized code used globally for scanning products at retail points. SKUs vary from business to business and can be customized for internal needs, whereas barcodes like UPC or EAN are universal and standardized across retailers and supply chains. In short, SKUs are for internal tracking, and barcodes are for external scanning.

Why are SKUs important in inventory management?

SKUs are important in inventory management because they help businesses accurately track product levels, sales trends, and stock movement in real time. By assigning a unique code to each product variant, companies can quickly identify what is selling, what needs restocking, and where losses or discrepancies occur. SKUs also improve forecasting, reduce manual errors, and streamline warehouse and retail operations, making supply chain decisions faster and more efficient overall.