What is Stock Keeping Unit (SKU)?

For businesses to have successful inventory management, product tracking must be done regularly and systematically. At this point, one of the most important tools that comes into play is stock codes, or the SKU system.

SKU stands for "Stock Keeping Unit". Thanks to this system, businesses assign a unique code to each product, making inventory control easier and making their operational processes more efficient.

What Are SKU Stock Codes Used For?

The benefits that SKU codes provide to businesses cover a wide range:

Inventory Management: SKU codes instantly show how much of which product is in stock.

Sales Analysis: Detailed data can be collected about how often products are sold and customer preferences.

Supply Process: It can easily determine when which products need to be ordered.

Cost Calculation: Each product's cost, profit margin, and pricing strategies can be analyzed in detail by SKU.

Customer Service: Service quality is increased by minimizing product finding time.

Warehouse Management: Product locations and layout within the warehouse can be optimized.

How is Stock Code Determined? Steps and Methods

1. Determine Product Categories: First step is to divide all products into logical categories.

2. Establish Hierarchical Structure: Create a system that progresses from main category to subcategories.

3. Identify Important Features: Determine critical features for each product category (brand, model, color, size, etc.).

4. Develop Abbreviations: Create understandable abbreviations for each feature.

5. Standardize Code Format: Ensure all codes follow the same logic and format.

SKU Stock Code Example

For Textile Store: Men's jeans, Levi's brand, 501 model, 32/34 size, blue color

SKU: MJP-LEV-501-32/34-BLU (Men's Jeans Pants - Levi's - 501 - 32/34 - Blue)