First of all, what is an SKU? – It is defined as a reference number or code with which a product is identified within a catalogue. The acronym SKU is derived from the phrase Stock Keeping Unit, a slightly more complicated phrase but it defines exactly what we are talking about.
SKUs may contain product information related to brand, size, color, gender, or any variation thereof; however, in some rare cases they are not defined from some characteristic of the product, but rather it is a sequence of letters and/or numbers with the sole function of being unrepeatable and identifying the product in question. The important thing here is that the SKU identifies a unique product. A SKU is not universal and is meant to be unique to your business.
For example, having a SKU called “248RSJGDFN” may sound like a joke, but it is actually much more useful than “Red Shirt” as it can easily be confused with similar shirts. In fact, you need a separate SKU name for each size of the same red shirt.
We must not confuse the SKU with the “name” of the product or with the barcode. Let’s look at some examples:
Product name: Apple iPhone 11, 256gb, teal
Product name: Wipes Pampers for babies (sensitive), white – pack of 168
Product name: Adidas Superstar Sneakers, size 8, white
I know what you’re thinking. The examples above are of products from very large brands worldwide and you probably think that your store does not need them because you know the products by heart, you always sell to the same customers, you do not have products with variations or you simply have few products. Although these points are valid, keep in mind that to scale your business you must have logistics (fulfillment services) and commercial alliances (sales through an online platform, billing portals) to reach your full potential. One of the requirements that all these potential partners will ask you for is a SKU for each product, since they need them to document sales, delivery, inventory and billing information.
Yaca recommends the Quickbooks SKU generator, which you can find at this link. Keep in mind that this is a suggestion and that you can generate your SKUs the way you want. Of course, keep in mind the following recommendations:
- Always keep the SKU between 8 and 12 characters.
- Keep all your SKUs with the same structure, even when your products have different variations.
- Try to make them simple for you and your team to understand.
- Sort the characters by importance. Example: for a shoe, the most important thing could be the brand, then the gender, model, size and color.
- Avoid using spaces, the number 0 (zero) or the letter O, letters that could be confused with each other (uppercase I – i, lowercase l – L), special characters, or symbols other than a hyphen “-“.
- Try to use only capital letters.
- Take into account possible future variations of products. For example, if you sell pine-scented candles, use that variation when creating your SKU. You never know when you’ll offer a cinnamon-scented candle!
Proper SKU definition and management is vital for organizing and tracking your inventory, aggregating stock data for better analysis, and of course for purchasing forecasts. Keep in mind that to send your products to Yaca, you need to have a SKU for all your products, including variants. If you have any questions about how to generate the SKUs for your store, contact us today.