Best Practices in SKU Management for eCommerce


Maintaining your inventory is essential to the success of any retailer or wholesaler. You should have an up-to-date system in place that will allow you to stay informed about what’s in stock, where it came from, and how much is left on hand at all times so as not to leave yourself vulnerable by running low just when a customer demand becomes high. 

There is no greater tool for inventory management than SKUs. SKUs allow retailers and wholesalers to track products with ease, helping them identify what’s available when it matters most so that you can rest assured of knowing your stocks. Properly managed stocks can be the secret to your business’s success.

What does an SKU stand for?

SKU stands for Stock Keeping Unit. The benefit of this, as the name suggests, is that if there are different variations in your products then each one should have its own separate SKUs to be tracked more easily and cataloged better by retailers who rely on these systems for inventory management purposes. This is why every product you sell needs a unique identifier—called an SKU or stock keeping unit.

Example image:


The SKU or Product Code is a great way to keep track of inventory for your business. A good way of implementing SKU into your business is to make the SKU code unique to only one item. This code should work as an identifier for a particular item.

This code will let people know if they are talking about the same item and also helps you identify what products exist in stock so that when one sells, it can be replaced quickly with another one from just this single line on file at any time during normal working hours without having too much difficulty.

Why use SKUs?

There are a few concepts more important than SKUs when it comes to inventory management. They help you:

  • Streamline ordering with SKUs. When you place purchase orders, it’s more likely that the products will be exactly what your company needs if they use price lists and order forms compiled using these unique reference numbers to identify each individual item in stock at any given time. Integrate inventory management software so both systems can access information about all available items quickly by entering just one keyword – “SKU” (or whatever others may call them).
  • Integrating SKUs with your e-commerce and ordering systems in a seamless process can save you time. This way, the right product will always be shipped to customers with just one identifier for each variation of an item—which means no more lost shipments operations!
  • Keep your inventory levels up-to-date by making sure that you use the same identifier for each product in all systems. This will ensure consistency and accuracy across departments, which can help save time!
  • Encourage people to buy now. If your business has an inventory problem, quote parts numbers or SKUs when you buy from us so we can expedite delivery and reduce mistakes in shipment- which means more money for both parties!
  • Managing inventory is a complex process that becomes even more difficult when you sell through multiple channels. A well-implemented KPI can be used as an indicator that your company is operating efficiently with minimal errors or discrepancies which will lead to increased revenue opportunities over time.

Example images:


What is the origin of SKUs?

This is dependent on who makes the product:

  • If the manufacturer is another company. These unique barcodes are created by central agencies and bought for use on items such as Global Trade Identification Numbers (GTINs), Universal Product Codes (UPCs), or European Article Numbers (EANs). Because every variant of your inventory has its own EAN/UPC code it can also act as an SKUs! For example, A book’s international standard book Number -the 10 digits or 13 digit numeral printed onto the cover-, will work perfectly well when using MYE Software to track their items online.
  • If you are the manufacturer. Whether you are a large company with your own retail store or an individual seller on Amazon, purchasing UPCs for your products is important. It’s also imperative that these codes be used efficiently with the labels and referred to at all times by both retailers/ sellers who use them in-store. You also need to integrate SKUs with online marketplaces such as eBay, Amazon, OTTO, etc where one can list his items without necessarily being present during the shipping process.

What makes a good SKU?

You can also create your own SKUs if you don’t have any, and they might be customer-facing as well so people won’t know about the fact that there are no genuine products from suppliers. This could help out with pricing systems for online retailers because some of them will price differently depending on where it was bought or how much someone weighs!

SKU development guidelines:

  •  It should be short. So that the identical data fit in all systems, an SKU must be 32 characters or less.
  • Use short SKUs to make sure they fit all systems.
  • If you start a SKU with the Number “0”, it will be dropped when input into Excel. This can cause problems and may lead to errors if not careful!
  • Make sure you never confuse your product with any other identifier, like model numbers.

Stay simple. Use numbers and letters with separators such as dashes or dots to make it easier for the system you are using, but don’t forget about spaces!

Which are better—character or numeric SKUs?

You can use character codes to make your products stand out more on the shelves. Character SKUs also allow you greater flexibility in sorting by style, description, color, and size; for example here is how three different size/color combinations from Nike Echostar would look as character-based inventory:






When you have a character SKU, like these, for example, the Store Inventory View will show which product is in stock. You won’t need to refer back and forth from the list as frequently when looking through your online store’s inventory because it can be seen right on the screen!

Character SKUs have the disadvantage of complicating selection and packing. If your picking team works from simplified 5-digit numbers, this might be a problem since it becomes difficult to find specific items in an organized warehouse with so many options available!

You can also use numbers and characters in your SKUs. For example, the COUNT-STAR Tee shirts are available with the number: SSP37-COUNT-STAR-T.

What about bar codes, for example?

The bar code is a basic method of storing data. The numbers or letters that make up this representation are called Bar Codes and can be used for any identifying mark we’ve discussed so far, like an ISBN (International Standard Book Number), UPC/EAN Code( Coupon Data Identification Number) And it’s even easy enough to market your own!. I’ve made one with 12 digits, which we’ll say “121016801952.”

Bar codes have been designed to speed up and reduce errors in Point of Sale (POS) operations. If you only use them within your business, it’s easy enough for any number of people with access can generate a bar code!

To make it easier for your consumers to find what they’re searching for, you may utilize product labels or strips. If you want them to do the same with their own inventory, give each one a UPC/EAN code so that both parties know how much stock there is of particular items

in circulation!

Benefits of using SKUs

SKUs can benefit your business by:

Streamlining your inventory management

Using an SKU can simplify your inventory tracking because they are usually shorter than UPCs. This may be easier for you or a team member who is entering the data into management software. Each code represents one item in their collection rather than many different ones with long sequences of numbers like those found on most barcodes today!

Time management improvement

Inventory management is a crucial part of any successful business, and using SKUs can help improve your time-saving skills. The store clerk could look up an item’s SKU (stock keeping unit) from her computer instead if she were trying to search for it within the company database; this means there won’t need as much walking around with heavy bags!

Inventory control and product recommendation

The SKU management system is a great way for businesses to track their sales and design marketing strategies based on customer habits. A digital inventory can also use these items as suggestions, encouraging customers into purchasing more products from the store by making related recommendations that may be of interest!

Keeping customers from finding things made by competitors

You may ensure that your consumers never locate the identical product in a competitor’s store when they search online by utilizing an SKU. Only yours will be available for purchase, making it easier than ever to keep those loyal customers coming back!


Now that you know how to use SKUs, where they can be found, and why it is important for your business’s success – let us help guide this process by implementing these changes with Brightpearl today!

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