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What are SKUs? Why is SKU Important to Manage Stock in Warehouses?

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What is an SKU (Stock Keeping Unit)? SKU is one of the absolute requirements for good warehouse management. Why is that? Because without an SKU, you will find it difficult to organize the items in the warehouse if the number is hundreds or even thousands of items.

With the SKU, it is hoped that it will make it easier for you to manage your business. The mention can be made as simple as possible in order to help smooth business, from the warehouse to the hands of the customer. 

For example, we will try with shoes.

Shoes are one of the protective foot objects for humans and at the same time complementary fashion for everyday style. There are many types of shoes, there are sports shoes (sports), leather shoes, and so on.

The Sports Shoes business is one of the most successful businesses today. Many business actors trade their products through various marketing patterns, both online-based such as marketplaces and offline in the form of retail.

People's enthusiasm in buying shoe products continues to increase from time to time. Moreover, at certain moments, such as the moment of entering school (new school year) or religious holidays, shoe sales will definitely increase and production will increase drastically.

With a large number of productions, easy to remember names need to be given to avoid mistakes. At this time, SKUs play an important role in facilitating this. Because shoes must have different sizes and different colors.

What is a Product SKU?

What does SKU mean? Maybe many people have heard about SKUs but there are still many people who still don't understand and even are foreign to these SKUs.

SKU or Stock Keeping Unit is a unique code that is given to each item of goods either purchased or sold by a company. SKUs are also known as part number, product number or product identifier.

Naming can be done by using the properties that exist on the item, such as the size, color, or type of the item. For example, the SKU code for Nike Shoes Black is size 42. You can write it as NIKEBLACK-42.

SKU is used in company stock information. This is what distinguishes an item from another and it is also often printed in barcodes to make it easier for companies to carry out stock inventories.

SKU Writing Identification 

The SKU code serves as a differentiator for the type or variant of goods, you also have to know what a good SKU looks like, a good SKU must be as short as possible, and easily recognizable from the code format.

This means that if you read the SKU code at a glance, you will immediately know the item referred to by the SKU code. 

For example, there is a product called "New Balance Children's Sport Shoes Black", then the implementation of the SKU can be in the format: NB-SPTSOT-ANK-HTM-0028. 

The explanation is as follows:

NB is the brand code, namely New Balance.

SPTSOT is a type of product, namely sports shoes.

ANK are children.

HTM is the color code for black.

0028 is the shoe size number.

Another example in the SKU format is in the form of a numeric sequel.

In this format, the sequel code is quite difficult to remember or identify, but in some cases it can be done by simplifying the format so that it can accommodate hundreds to tens of thousands of product types without thinking about the unique code in the form of a sequel to a letter combination that has limitations (26 letters x 26 letters x 26 letters = 17,576 possible unique codes for the 3-letter numbering format).

Types and Examples of SKUs in the marketplace such as in the ZALORA marketplace.

ZALORA uses SKUs to identify and track the whereabouts of products and to check orders. Each product has a different SKU based on the brand, type, size, and color.

Functions of Making SKUs

Several functions are obtained from the existence of these SKUs, such as easy checking of products in inventory, preventing shrinkage such as damaged, lost, or not ready to use products, and inventory restock where goods can be prepared again.

Inventory tracking usually uses barcode labels, barcode scanners, and inventory tracking system software to collect inventory data. The barcode label on the inventory tracking usually contains an SKU (Stock Keeping Unit) attached to the stock of goods.

Difference between SKU and UPC


What is the difference between SKU and UPC? 

Many people assume that the SKU number is the same as the term barcode or also with the UPC. Even though barcodes can be used for SKU or UPC. This means that a barcode is a barcode which is another form of SKU or UPC.

UPC stands for Universal Product Code. So unlike SKUs which are unique and created by the shop owner/retailer, this UPC number and code is the same at every retailer. UPC is created by the manufacturer as the primary code for a product, and only tracks basic info.

Retailers must add this UPC to their inventory database and create an SKU for use in the system.

However, many accounting systems allow you to use the UPC as well as the SKU in the store. You just need to enter all the classification details into the inventory database to match.

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