What are SKUs? Effective ways to work with tem
SKUs play a key role in warehousing
A Stock Keeping Unit (SKU), serves as a unique identifier for products within an inventory, distinguishing each item from the rest. These codes typically encapsulate various details such as brand, model, color, size, and other pertinent information.
Businesses have the autonomy to devise their own SKU systems, tailoring them to include specific data. Some opt for automated SKU generators, which randomly assign codes based on factors like product type, supplier, or entry date into inventory. For instance, an automated generator might produce a code like "PRD-1234" for a particular item.
Alternatively, certain enterprises prefer manual SKU systems, enabling customization of codes to accommodate desired product information.
What's the Purpose?
The primary aim of SKUs is to provide a streamlined and accurate method for identifying and tracking products within a company's inventory. Particularly beneficial for establishments offering diverse products like retail stores or online platforms, well-organized SKU systems facilitate detailed stock records and simplify inventory management.
For example, in a clothing store, each garment might boast a distinct SKU reflecting vital details. A Levi's cotton shirt in medium size and dark blue color could carry a SKU such as "LEV-SHIRT-COT-MED-BLUE." The same shirt in a small size might sport an SKU like "LEV-SHIRT-COT-SML-BLUE," and so forth for various variants.
This approach allows store personnel to effortlessly locate items in inventory using their SKUs, ensuring availability for sale. Moreover, SKUs enable tracking of inventory and sales for specific garment models, aiding decision-making regarding purchases and future marketing strategies to promote slower-moving products.
Benefits of Employing SKU Codes for Retailers:
Product Tracking: A robust SKU system facilitates precise identification and location of products within the inventory, streamlining association with other catalog management data such as stock levels, supplier details, shipments, or sales forecasts.
Sales Forecasting: Analyzing demand and sales volumes for each product over time via unique SKU codes enables informed decisions on sales strategies and promotions. It also allows quick identification of high-performing products.
Enhanced Customer Satisfaction: Utilizing SKUs enables swift product location, reordering of previous items, recommendations for similar products, and comparison of features, enhancing the shopping experience. Additionally, it allows for immediate resolution of stock queries in physical stores.
Prevention of Overstock and Out-of-Stock Situations: Better inventory control facilitated by SKUs minimizes unsold items and excess stock, reducing storage costs and product wastage. It also helps in avoiding both overstock and out-of-stock scenarios.
Tips for Creating SKU Codes
Establish a simple and specific SKU format for easy identification. Maintain consistency in format across all SKU codes. Ensure the uniqueness of each SKU to avoid confusion. Simplify the process using inventory software that integrates seamlessly with your system, like Augment. Incorporate relevant product details into the SKU for easy identification by employees. Test the SKU system before implementation to rectify any errors or make necessary adjustments.