SKU (Stock Keeping Unit)

What is a stock keeping unit (SKU)?

A SKU (Stock Keeping Unit) is a unique, internal alphanumeric code used by retailers and fulfillment providers to identify and track specific products within an inventory system. Unlike a UPC (Universal Product Code), which is standardized for external use across all retailers, a SKU is merchant-specific, allowing a business to customize its inventory architecture based on attributes like size, color, material, and warehouse location.

How do businesses use SKUs?

Merchants assign a SKU to every sellable variation of a product. A blue medium shirt and a red large shirt get different SKUs even though they're the same style. Warehouses use SKUs to locate stock, count inventory and pick orders. Sales channels use them to keep availability in sync across a web store, marketplaces and fulfillment centers.

How should you structure a SKU?

Most operators build SKUs from short segments, such as product type, style, color and size. Consistent formats make reports easier to read. Never reuse a SKU for a different product, and skip special characters that scanners or spreadsheets may misread.

Back to the full glossary.