Create SKUs for Products the Easy Way and Improve Inventory Tracking Capabilities

It is great to have orders pouring in but what if you are not to able to find the product in your inventory instantly to get it ready for shipping. Wouldn’t that be a disaster? Say bye to those nightmares, SKUs are here for your rescue.

Your ability to identify each product uniquely (inventory tracking) depends on how well you have managed to name SKUs for each product.

What follows next will be a brief explanation of what is SKU, advantages of SKU and a quick know-how on how to create SKU for effective inventory control.

What is SKU?

product sku

SKU is an acronym for ‘Stock Keeping Unit’. It is a combination of letters and numbers given to a product to distinguish it from 1000s of others. They are abbreviations which denote attributes of a product like name, manufacturer, color, size, capacity etc.,

These information can be used by employees to identify them through an an inventory management system. SKUs are not universal, rather local to every business for the benefit of stock control staffs to understand and identify them easily. SKUs can also be converted as scannable barcodes.

Inventory Shortcomings that SKUs Can Avoid

Identify Shrinkage

Identifying shrinkage tells you the number of items which cannot be sold as loss of products normally happen in any part of a supply chain but especially due to theft. An inventory management backed by SKU will help in creating transparency and minimizes product loss due to theft.

Avoids Human Errors

SKUs are highly safe when it comes to dealing with 1000s of products. When turned into a barcode, SKUs can be 99% accurate which reduces the human errors like taking into account the wrong product during stock audits or picking up an alternate product during stock counts. Thus the overall quality of your supply chain improves.

You’ll Never Run out of Stock

For businesses of any size, managing large number of inventory becomes difficult. If an inventory management system is powered by SKUs, knowing how much of each product is in hand can be easy. An alert can be set for products in less numbers to place purchase orders proactively.

Perks of SKU

Prepares your Business for Multi-channel and Universal Standards

When you are into multi-channel selling especially listing in 3rd party marketplace websites like Amazon, eBay, SKU becomes a norm. Without SKUs, selling via multiple sales channels becomes unmanageable in no time and to some extent you need SKUs to even just buy an entry ticket into popular marketplaces.

Information is Conveyed in a Flash

Just a look at an SKU can inform an employee in charge of stock control to easily identify a product. SKUs, if properly managed, can help in unmistakably identifying what the product is.

Quicken Warehouse Operations

SKUs come in handy at various levels of your supply chain like stocking, picking, packing and shipping. With SKUs, your employees can search and track easily which helps in accelerating the pace with which your whole fulfillment team respond to incoming orders.

How to Create an SKU

SKUs are not universal. Each business can have its own SKU creating procedure which can be easily translated by its employees to identify products quickly. However, knowing how the syntax of how to create an SKU for the product could help you come up with your own idea.

1. Define a Format

The format determines what comes first and what follows it, which is similar to deciding whether to put the brand’s name first or product’s name first and other attributes like size, color in what order.

For instance, an SKU format can be like this:

Manufacturer name (or) Brand identifier, Category identifier, Product name-color identifier-size identifier

A ‘Nike backpack’, under the ‘Neo Series’ which is ‘Blue’ in color and ‘Large’ in size can have a SKU like : N-BP-Neo-BL

2. Decide What to Include and What not to

Make sure you choose only the key identifiers required for a product and everything related to it when you name your SKU. This avoids your SKU from becoming too long.

3. Create Codes

Codes are short forms for attributes that your stock keeping staffs know. As a product has multiple attributes, you will have to create and maintain a list of codes for your inventory and educate it to your team. In case of colors, ‘RD’ can denote color ‘Red’.

To make things much easier while creating SKUs, we have jotted down a list of Do’s and Dont’s which can otherwise be called as SKU Best Practices.

DO’s: DON’Ts:
The shortest your SKU is, the clearer it ill be to relate Come up with lengthy SKUs
Create clear identifier codes for attributes Use special characters
Use dashes as separators

How to Generate SKUs Automatically ?

If SKUs can save time at multiple stages of fulfillment, generating SKUs automatically can save plenty more. Sounds great right?

If you decide to keep off from generating SKU on your own but still need it, Contalog can be the choice. Contalog is an inventory and order management system bestowed with a Product SKU generator that benefits business owners from automatically creating SKUs for configurable products.

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