What Are SKUs?
Stock Keeping Units or SKUS are the internal record number of the products for companies. Unlike barcodes (EANS or European Articles Numbers or UPC or Universal Product code), SKUS are your own product identification number and not centrally organised.
- Best Practice of SKUs
- Set out a format for your SKUs and stick to it, so all SKUs are in the same format. Bare in mind our product range will increase over time.
- Try and identify your business in the SKU, it helps make them unique. Sam’s widgets ltd may start their SKUs with SAM-XXXXX
- Create your SKU and don’t use those of a supplier
- Avoid using non-standard characters, stick to letters and numbers. Using nonstandard characters such as / @ or # can cause problems if your data is transmitted electronically as these characters have uses in computer code. In addition, they are often not allowed by market places such as Fruugo, Ebay or Amazon.
- Don’t start your SKUs with a zero, on spreadsheets and other electronic records the leading zeros are often removed and this can make your life difficult.
- Avoid using certain letters which can be misread, such as O and 0 or I and 1. Wrong inputs can make reconciliation difficult and cause no end of problems getting your stock records to match.
- Don’t make SKUs too long, use the minimum needed for your business, keeping in mind your business may grow.
- Don’t mix cases, keep them either all capitals or all lower case
- What are the limitations of SKUs?
The main weakness of SKUs is that they are not necessarily unique. As your company chooses the SKU then there is nothing to stop over companies also picking the same SKU.
This is why if you wish to sell your products on market places such as Frrugo, or Amazon they specify that a EAN (European Article Number) or UPC (Universal Product Code) in addition to a SKU.
Because SKUs are not centrally organised there is also the possibility of your SKU not being unique. A consumer searching for your SKU might find some one else’s products not yours. So keep this in mind when designing the format of your SKUs.
- What’s the difference between a UPC and a EAN?
UPCs (Universal Product codes) are used mostly in North America and are a 12-digit system. Although being the original barcode system outside of the US other countries wanted to be able to localise the barcodes so added an additional digit to the number. These are the EANs
EANs are the predominant system in the UK, Europe and the rest of the world. The most commonly used is EAN-13, based on a 13-digit number. The first three digits are used to denote the local GS1 agency that issued the EAN. In the UK these are 500–509.
The various organisations which organise barcodes are working to ensure that in future all the different standards are compatible.
In the UK
EANS are issued by GS1 and in the UK this is the responsibility of GS1-UK https://www.gs1uk.org/
Outside the UK
European countries have their own local GS1 agencies and can be found by looking online.
UPC can be accessed by joining the US GS1 agency https://www.gs1us.org/
Implementing best practice SKUs is essential for enhancing inventory management, improving operational efficiency, and optimising data analysis in any business. By making sure that you standardise SKU creation with a logical, consistent coding system, your company can minimise errors, streamline their processes, and better analyse your sales and stock levels — resulting in cost reduction and efficiency gains.
