One of the biggest fears that online and offline retailers face is having to deal with deadstock. You have a pile of products that are lying around in your warehouse previously undetected when they could have been yielding revenue instead. This is exactly why you need to use SKUs for inventory management. You should have a systematic approach to recording and tracking your inventory to ensure that every single product is accounted for and you’re not losing money on items that have fallen through the cracks.
The best way to increase inventory turnover and to minimize deadstock is to implement inventory identifiers. The SKU number is just one of the many methods that you can use for your business. It is also one of the most common ones. In this post, we’ll talk about what it is exactly and how you can use it for your Strikingly ecommerce store.
What is a SKU?
Stock Keeping Unit or SKU (pronounced as “skew”) is a 6-9 character alphanumeric code that is used to identify a particular product from all others in an inventory. They are also called item numbers, model numbers or product codes. It is important that your inventory management system is able to identify the product they are referring to when you call the code up so you can identify the status of the inventory - e.g. in-stock, delivered, etc.
One thing to note about SKUs is that they are not universal. They are meant to be identifiers that are unique to a particular store or company. This ensures that you don’t get your inventory mixed up with other businesses or business units if you are running several different stores. Also, the alphanumeric code is not just a random combination of numbers and letters. They have to stand for something that essentially describes the product they are meant to identify.
What SKUs are NOT
Many people tend to mix up SKUs with UPC bar codes. UPCs are universal product codes and as the name implies, they are not necessarily unique to a particular store. They are universal codes attached to a given product issued by the Global Standards Organization. UPCs identify a product’s manufacturer and the item and are usually numeric rather than alphanumeric. An Adidas t-shirt, for instance, will have the same UPC regardless of which retailer sells it but it will have a different SKU depending on the seller.
SKUs are internally assigned and are used to make data entry and inventory management within a store easier. UPCs are used by manufacturers to identify their products.
What SKUs contain
Within this seemingly random combination of letters and numbers you can find information about the product it represents. This includes the product type, manufacturer, brand, model, color, size and warranty terms among others. Similar products share the same SKU. For instance, going back to our Adidas t-shirt example, 10 pieces of this t-shirt in the same print and size can have an SKU that looks similar to this: ADI-VN-RED-36. SKUs are meant to be easily understood by staff and also scannable through the internal barcode scanner for easier monitoring.
Why are SKUs important?
SKUs allow retailers to manage their inventory systematically. If you’re running multi-channel sales channels, SKUs help you keep track of your inventory, providing you with information that you need to plan sales campaigns or replenish items when they run out of stock. This identifier provides you with information about any product in your inventory, making items easier to locate in your warehouse.
Assigning SKUs on your inventory also minimizes human error related to pricing and stock take. This ensures that orders will go out accurately and in a timely manner. When orders are served properly and service levels are up, customers are happy. Satisfied customers turn into loyal buyers.
Once you have assigned SKUs to your inventory, you can now proceed to do a batch import of your products into your Strikingly online store.